Gird Your Investor Loins: Ford Predicts $2 Billion Loss

Steph Willems
by Steph Willems

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]

Steph Willems
Steph Willems

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  • Robbie Robbie on Apr 19, 2020

    Ford and GM will survive, but as pickup manufacturers for the US market.

  • Cprescott Cprescott on Apr 20, 2020

    I too had bought Ford stock (dollar cost averaged to $1.98) as a hedge for an unemployment fund when King Pimple of a Man was elected President. By 2010 I was able to survive King Pimple's economic payback of unemployment off of my Ford nest egg.

  • Eliyahu CVT needed for MPG. Outback is indeed the legacy of, err, the Legacy.
  • Gayneu I can comment on these. My wife always thought the Minis were "cute" so I bought her a used 2005 (non-S, 5 speed) for one of her "special" birthdays. She loved it and I kinda did too. Somehow a hole developed in the transmission case and the fluid drained out, ruining the car (too expensive to fix). A local mechanic bought it for $800.We then bought a used 2015 S (6 speed) which we still have today (80k miles). Her sister just bought a used S as well (also manual). It has been a dependable car but BMW-priced maintenance and premium gas hurts for sure. I think the earlier generation (like in the article) were better looking with cleaner lines. The 2015 S rides too stiff for me (Chicago roads) but is a hoot on smooth ones. It does seem to shift weird - its hard to describe but it shifts differently from every other manual I have driven. No matter how hard I try, so won't let go of her Mini.
  • Crown Seems like they cut some cylinders too.A three cylinder...where are they planning on selling that??
  • Slavuta "There’s also the problem of climate change, and the more intense weather that comes along with it"How could one even write something like this? We don't have more intense weather. We have better weather. When Earth started, it was a fiery ball. We don't know what weather was in 1700. And even if we know some of it in Europe, we don't know what was happening in Africa, South America, Oceania, etc. We have people living in places where they did not live before. We have news that report weather related events minutes later or during. This did not happen before. There is no evidence that we have an increase in intensity. I looked into historical records in the area where I live - there is not much movement at all between 1970 and now. And remember - none of the previous weather predictions have materialized.
  • VoGhost Very soon, every home will have a 240v outlet in the garage, which can function as your electric charger, just like a modern home has 120v electric outlets and light switches inside the house. This is where the market is going. You all would see that if you didn't have those oil soaked blinders on.