Ford 3rd quarter losses at $380 Million
Ford today reported an operating loss for the 3rd quarter at $380 Million down from initial estimates of $850 Million as late as yesterday, excluding restructuring costs. This comes after 2 consecutive quarters of earnings.
Newly minted Ford CEO Alan Mullaly’s first quarter, 2nd Quarter 2007, earnings were $750 Million. Mullaly says this reduction in loss puts Ford “on track” to return to profitability in 2009.
Losses were attributed to an 18% drop in sales for the 3rd quarter, which have also led to Ford’s drop from number 2 to number 3 in total U.S. sales behind Toyota Motor Company. Rising gas prices have affected sales of pickup trucks and SUVs which account for about 3/8’s of Ford’s sales. In addition, the housing slump has put a damper on sales from contractors.
Ford has also reduced sales by cutting back on low-margin rental-car sales. Helping Ford to beat the estimates was a 11% surge in Ford China sales.
Losses always sound like bad news, but for Ford in throws of a major turnaround effort, beating the estimates by nearly half a billion signals the outlook might just be positive after all, albeit with a few bumps along the way.
Source: Bloomberg
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