Ford is expected to announce a second quarter loss tomorrow (23 July) but investors are likely to focus on whether the automaker slowed cash burn in the second quarter as forecast.

Eyes will also be on how quickly the automaker will deal with an auto debt burden of US$25.8bn at the end of March and reverse years of losses.

Ford’s automotive business burned through $3.7bn in the first quarter and ended March with $21.3bn in cash, Reuters noted.

“I suspect they are going to have very good news for the quarter and I could see in the short term the stock going up more than it has,” Morningstar analyst David Whiston told the news agency.

“Long term, I still think they have significant issues that investors need to be aware of. They are still burning cash and they still have a lot of debt on their balance sheet.”

Analysts on average expect Ford to post a loss of 53 cents per share excluding one-time items, according to Reuters Estimates, compared with a loss of 62 cents a year earlier.

Last week, JP Morgan said Ford’s second quarter results may be better than the analysts’ consensus forecast due to improved pricing in North America and Europe, as well as sequential increases in production.

Credit Suisse has reduced its forecast second quarter and full 2009 per share loss forecasts for Ford, while saying the automaker must address longer-term challenges, including debt.

Ford has said it expects to return to profitability in 2011.

Chief executive Alan Mulally told reporters on Tuesday that the automaker was on track in dealing with its debt.

“On our debt, we are right following on plan exactly,” Mulally told reporters on the sidelines of an event that showcased 2010 model year Ford vehicles, as well as in-development plug-in hybrids and a battery electric compact car.

“We have a sufficient amount of liquidity to finance our entire transformation,” Mulally said, adding: “As we continue our road to profitability the cash flow will just accelerate the improvement of our balance sheet.”

Ford borrowed $23bn in 2006 secured by most of its remaining assets, including the Blue Oval logo, to support a multi-layered restructuring and now carries a far heavier debt burden than the post-bankruptcy GM and Chrysler, Reuters noted.

Chief financial officer Lewis Booth told the news agency earlier this month that GM and Chrysler may have “slightly cleaner” balance sheets than Ford, but face a range of continuing problems.

Ford cut its automotive debt by about $10bn by completing a series of transactions in early April and raised $1.6bn through a public stock offering in May it used to support funding for a US union retiree healthcare trust.