By on April 17, 2020

Image: Ford

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]

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10 Comments on “Gird Your Investor Loins: Ford Predicts $2 Billion Loss...”


  • avatar
    dwford

    I owned Ford stock all the way down to $1 back in the day, and all the way back up. Not worried.

  • avatar
    deanst

    It would be more appropriate if the truck in the photo was cerulean…..

  • avatar
    redapple

    Ms Barra’s aggressive chopping over the last 1-3 years looks very wise now.

  • avatar
    ToolGuy

    Fact: “The Young and the Restless” is the most popular daytime soap opera.
    Possible Inferences (you choose which if any are appropriate):
    – “The Young and the Restless” is amazingly good
    – “The Young and the Restless” has never been better
    – There is no way “The Young and the Restless” could be improved

    Fact: “The Young and the Restless” has been in the number one spot since the 1988-1989 season.
    Possible Inference (you choose if appropriate or not):
    – “The Young and the Restless” has been consistently excellent for 32 years

    Fact: “The Young and the Restless” has a 2.7 Nielsen rating for the 2019-2020 season.
    Fact: “The Young and the Restless” had an 8.7 Nielsen rating in the 1987-1988 season (tying “General Hospital”).
    Fact: “As the World Turns” had a 15.4 Nielsen rating in the 1963-1964 season.
    Fact: “Search for Tomorrow” had a 16.1 Nielsen rating in the 1952-1953 season.
    Possible Inferences:
    – You’re on your own here

  • avatar
    Jeff S

    Lou, is that the truck you were interested? If so it might be a good time to make them an offer, you might even get it for less.

  • avatar
    Robbie

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

  • avatar
    cprescott

    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.

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