Gird Your Investor Loins: Ford Predicts $2 Billion Loss

Steph Willems
by Steph Willems
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]

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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.

  • Jeff S I am not a fan of Tesla and they were niche vehicles but it seems that they have become more common. I doubt if I get an EV that it would be a Tesla. The electrical grid will have to be expanded because people over the long run are not going to accept the excuse of the grid can't handle people charging their EVs.
  • AMcA The '70 Continentals and Town Cars may have been cousins to the standard body Fords and Mercurys, they didn't have to be disguised, because they had unique, unbelievably huge bodies of their own. Looking at the new 1970 interior, I'd say it was also a cost savings in sewing the seat. Button tufted panels like the 1969 interior had require a lot of sewing and tufting work. The 1970 interior is mostly surface sewing on a single sheet of upholstery instead of laboriously assembled smaller pieces. FINALLY: do I remember correctly that the shag carpet shown under these cars was a Photoshop? They didn't really go so peak '70s as to photograph cars on shag carpets, did they?
  • Inside Looking Out Toyota makes mass market cars. Their statement means that EVs are not mass market yet. But then Tesla managed to make mass market car - Mode; 3. Where I live in CA there are more Tesla Model 3s on streets than Corollas.
  • Ltcmgm78 A lot of dirt must turn before there's an EV in every driveway. There must be a national infrastructure plan written by other than politicians chasing votes. There must be reliable batteries that hopefully aren't sourced from strategic rivals. There must be a way to charge a lot of EVs. Toyota is wisely holding their water. There is a danger in urging unplanned and hasty moves away from ICE vehicles. Do we want to listen to unending speeches every election cycle that we are closer than we have ever been to 100% electrification and that voting for certain folks will make it happen faster? Picture every car in your town suddenly becoming all electric and a third of them need a charge or the driver will be late for work. This will take a lot of time and money.
  • Kendahl One thing I've learned is that cars I buy for local errands tend to be taken on 1,000 mile trips, too. We have a 5-speed Focus SE that has gone on longer trips than I ever expected. It has served us well although, if I had it to do over again, I would have bought an ST. At the time of purchase, we didn't plan to move from 1,000 feet elevation to 6,500. The SE is still adequate but the ST's turbo and extra power would have been welcome.
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