Ford's Earnings Report Not Nearly As Dismal As Feared
Ford Motor Company made many investors happy on Thursday, reporting a less-than-feared loss in the second-quarter of 2020.
Despite the company’s chief financial officer predicting a Q2 loss of $5 billion or more three months ago, the automaker’s actual earnings before interest and taxes was only in the red $1.9 billion — a minor miracle given the stormy backdrop.
Thanks to a sizable gain ($3.5B) on its investment in self-driving tech firm Argo AI — a move arising from its mini-alliance with Volkswagen — Ford’s net income was $1.1 billion. Strip that away and the EBIT loss was $1.9 billion, far less than predicted. Naturally, Wall Street responded quickly in after-hours trading, with the company’s stock rising more than 4 percent.
Revenue of $16.6 billion last quarter, while down 54 percent over the same quarter a year earlier, outpaced estimates of just under $16 billion. The company claimed nearly $40 billion in liquidity at the end of Q2 and boasted of a $7.7 billion credit line repayment earlier this month.
Ford credited the minimized damage to a safe and “effective” restart of its domestic manufacturing facilities back in mid-May.
“I could not be prouder of the Ford team’s optimism and effectiveness as we manage through
this pandemic,” said CEO Jim Hackett in a statement. “We delivered a strong Q2 while keeping
each other safe, caring for customers and neighbors, and assuring tomorrow.”
Strong product (Ford says its retail market share rose more than 1 percentage point in Q2, helped by strong demand for the F-Series truck line) and enthusiastic demand for upcoming ones (Bronco) gives the automaker hope for the future. The company forecasts pre-tax earnings of $500 million to $1.5 billion in Q3.
Earlier this week, Detroit rival General Motors reported a second-quarter loss of $800 million.
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- Darren Mertz In 2000, after reading the glowing reviews from c/d in 1998, I decided that was the car for me (yep, it took me 2 years to make up my mind). I found a 1999 with 24k on the clock at a local Volvo dealership. I think the salesman was more impressed with it than I was. It was everything I had hoped for. Comfortable, stylish, roomy, refined, efficient, flexible, ... I can't think of more superlatives right now but there are likely more. I had that car until just last year at this time. A red light runner t-boned me and my partner who was in the passenger seat. The cops estimate the other driver hit us at about 50 mph - on a city street. My partner wasn't visibly injured (when the seat air bag went off it shoved him out of the way of the intruding car) but his hip was rather tweaked. My car, though, was gone. I cried like a baby when they towed it away. I ruminated for months trying to decide how to replace it. Luckily, we had my 1998 SAAB 9000 as a spare car to use. I decided early on that there would be no new car considered. I loathe touch screens. I'm also not a fan of climate control. Months went by. I decided to keep looking for another B5 Passat. As the author wrote, the B5.5 just looked 'over done'. October this past year I found my Cinderella slipper - an early 2001. Same silver color. Same black leather interior. Same 1.8T engine. Same 5 speed manual transmission. I was happier than a pig in sh!t. But a little sad also. I had replaced my baby. But life goes on. I drive it every day to work which takes me over some rather twisty freeway ramps. I love the light snarel as I charge up some steep hills on my way home. So, I'm a dyed-in-the-wool Passat guy.
- Paul Mezhir As awful as the styling was on these cars, they were beautifully assembled and extremely well finished for the day. The doors closed solidly, the ride was extremely quiet and the absence of squeaks and rattles was commendable. As for styling? Everything's beautiful in it's own way.....except for the VI coupe....it's proportions were just odd: the passenger compartment and wheelbase seemed to be way too short, especially compared to the VI sedan. Even the short-lived Town Coupe had much better proportions. None of the fox-body Lincolns could compare to the beautiful proportions of the Mark V.....it was the epitome of long, low, sleek and elegant. The proportions were just about perfect from every angle.
- ToolGuy Silhouetting yourself on a ridge like that is an excellent way to get yourself shot ( Skylining)."Don't you know there's a special military operation on?"
- ToolGuy When Farley says “like the Millennium Falcon” he means "fully updatable" and "constantly improving" -- it's right there in the Car and Driver article (and makes perfect sense).
- Master Baiter New slogan in the age of Ford EVs:FoundOnRoadDischarged
Less loss is always better than more loss but no loss is the best. Let's not break out the bubbly yet there are 2 more quarters left in the year.
How this is better than Nissan?