Ford expects to lose money for the year as fewer people buy cars and trucks and it retools plants in the fourth quarter to launch a new version of its best-selling F-150 pick-up.
Tim Stone, chief financial officer, said the Dearborn carmaker would post its strongest quarterly results this year in the third quarter. He gave a wide expected earnings range of between $500m to $1.5bn before interest and taxes.
The fourth quarter, though, likely will yield a loss when changing over factories to produce the new F-150, which will reduce the number of sales to car dealers “significantly”.
Ford’s revenue fell 50 per cent in the second quarter to $19.4bn. The company reported an adjusted $1.9bn loss before interest and taxes in the second quarter — far better than the $5bn loss Mr Stone predicted three months ago.
Wall Street analysts expected a diluted loss per share of $1.19. Instead, it was a loss of 35 cents a share. Ford shares rose 3 per cent after-hours.
Mr Stone attributed the company’s smaller loss to operational execution during a quarter when plants were shut down for two months to contain the spread of Covid-19. Ford, General Motors and Fiat Chrysler Automobiles closed their factories from approximately late March to late May, and US car production fell 69 per cent year over year.
Production and sales to dealers were better than the company anticipated in the spring, Mr Stone said. Ford also benefited from roughly $1bn in lower costs and $1bn in better pricing on vehicles.
“Overall, it’s a good quarter for Ford, in light of the circumstances,” he said.
The company announced two important products during the second quarter, the revamped F-150 and the revived Bronco, brought back into production to compete with Fiat Chrysler’s Jeep. The Bronco has a reservation list of 150,000.
“The reservation numbers are far beyond what we expected,” said Jim Farley, chief operating officer.
The company now is trying to figure out how it can increase capacity to meet demand for the off-road vehicle.
Ford is two years into an $11bn restructuring meant to improve profits and accelerate the company’s development of electric and self-driving cars. It has dropped car models in North America and cut jobs in Europe.
Despite the pandemic, Mr Stone said that the company had “absolutely not stalled” on its restructuring effort. He later added, when speaking to analysts, that there was “nothing new to announce this time” about the programme’s progress, “but we’re keenly focused on it”.
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