Gird Your Investor Loins: Ford Predicts $2 Billion Loss

The earnings picture is growing gloomier at Ford, with the automaker now preparing investors for a steep loss in the first quarter of the year. After posting a poor Q4 report for the end of 2019, some of that pre-pandemic weight could carry over onto this report card — where it will mix with U.S. sales that tanked in the middle of March.

If only it was American sales Ford needed to worry about.

Those, of course, make up the vast bulk of Ford’s revenue, though its Chinese and European businesses can’t be forgotten. Those regions blinked off in mid-January and February, respectively. It’s no surprise that Ford now expects a $2 billion net loss in Q1.

That tidbit comes by way of a Securities and Exchange Commission filing seen by CNBC. Earlier in the week, Ford stated that it expected a $600 million pre-tax loss combined with a 16-percent drop in revenue, adding that a full financial rundown will greet investors’ eyes on April 28th.

On the bright side, the automaker said its reserves are healthy, with about $30 billion in cash on hand. In an email to CNBC, Ford said it believes “the present cash balance is sufficient through at least the end of the third quarter, even without resuming additional production or further financing actions.”

Like its main Detroit rival, General Motors, Ford has spent the last few years attempting to get its global house in order. Money-losing overseas businesses have been streamlined, assembly plants sold off, and low-margin product pared down. Preparing for an inevitable rainy day often pays off.

Also in the automaker’s corner is its best-selling F-Series truck lineup, which happens to offer the kind of product deep-pocketed Americans can’t get enough of — even in the middle of a pandemic-prompted lockdown. Full-size truck sales have shown a remarkable resiliency in recent weeks, with J.D. Power data revealing sales down just 18 percent below pre-virus forecasts last week. Compare that to the 55-percent drop seen industry-wide.

That said, it looks like Wall Street soaked up the bad news without getting its hair mussed. Ford’s stock is up just over 4 percent in Friday trading.

[Image: Ford]