Ford to Follow Up a Less-than-stellar Earnings Report With an Even Worse One

Steph Willems
by Steph Willems

Much earlier this year, Ford had the unpleasant task of presenting investors and analysts with an earnings report that reflected two serious headaches. The botched launch (and expensive repair effort) of the 2020 Ford Explorer and Lincoln Aviator weighed heavily on the automaker’s balance sheet in the final quarter of 2019, and a flurry of sizable recalls didn’t help things, either.

Today, Ford’s most pressing issue has nothing to do with quality. In a pre-earnings announcement Monday, the automaker told investors to expect a pretty unpleasant report at the end of the month.

As plants remain shuttered across North America and customers stay away from dealerships that may or may not be open, Ford says its expects an adjusted pre-tax loss of $600 million in the first quarter of 2020. Not included in that $600 million figure is $300 million in special items. The company also said it expects a 15.7-percent drop in revenue.

Ford’s earnings report will see the light of day on April 28th.

As you’d expect, Wall Street reacted negatively to the announcement, with the automaker’s stock falling nearly 6 percent in Monday morning trading. A run of bad news, and in this case luck, prompted Ford’s share price to drop more than 40 percent since the start of the year — exactly the opposite of Jim Hackett’s intent when he came aboard as CEO. Boosting the company’s stock has proven a near-impossible challenge, even before the launch issues of late 2019.

The current circumstance is exceptional, and at least Ford’s not alone in it. Big-ticket product is still on the way, and one day the company’s American assembly plants will reopen, along with dealers. The automaker said that, while the pandemic has caused financial damage, it’s well-prepared to handle the fallout.

As of April 9th, Ford had $30 billion in available cash, bolstered by an extra $15.4 billion sourced from two credit lines late last month.

“We believe we have sufficient cash today to get us through at least the end of the third quarter with no incremental vehicle production and wholesales or financing actions,” said Ford Chief Financial Officer Tim Stone, adding that, “We also are identifying additional operating actions to enhance our cash position.”

[Image: Chris Tonn/TTAC]

Steph Willems
Steph Willems

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  • EBFlex EBFlex on Apr 13, 2020

    Wait you mean decimating quality in an effort to increase profits didn't help? Well color me shocked.

  • Dukeisduke Dukeisduke on Apr 13, 2020

    "Hackett - you're fired!" Next up? Jim Farley? You gotta be kidding me.

  • Ted Lulis Head gaskets and Toyota putting my kids through college👍️
  • Leonard Ostrander Plants don't unionize. People do, and yes, of course the workers should organize.
  • Jalop1991 Here's something EVangelists don't want to talk about, and why range is important: battery warranties, by industry standard, specify that nothing's wrong with the battery, and they won't replace it, as long as it is able to carry 70% or more of its specified capacity.So you need a lot of day 1 capacity so that down the road, when you're at 70% capacity with a "fully functioning, no problem" car, you're not stuck in used Nissan Leaf territory."Nothing to see here, move along."There's also the question of whether any factory battery warranty survives past the original new car owner. So it's prudent of any second owner to ask that question specifically, and absent any direct written warranty, assume that the second and subsequent owners own any battery problems that may arise.And given that the batteries are a HUGE expense, much more so than an ICE, such exposure is equally huge."Nothing to see here, move along."
  • Roger hopkins The car is in Poland??? It does look good tho...
  • Kwik_Shift_Pro4X The push for EV's is part of the increase in our premiums. Any damage near the battery pack and the car is a total loss.