Ever the company to put a positive spin on things, Ford said today that its first quarter loss of six cents per share, excluding unusual items, beats consensus estimate of a loss of 15 cents per share and that the European automotive operations made a profit of $117 million.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
However, Ford still had to report a net loss of $800 million, or 45 cents per share, in the first quarter of 2002. Excluding unusual items related to Statement of Financial Accounting Standards (SFAS) Nos. 142 and 133, Ford lost $108 million, or 6 cents per share after earning $1.13 billion, or 60 cents a share, before unusual items in the first quarter of 2001.
Ford’s first quarter revenues were $39.86 billion, a six percent decline from last year’s first quarter. Worldwide vehicle unit sales in the 2002 first quarter were 1,678,000, down seven percent from a year ago.
“Our first quarter performance shows that our revitalisation plan efforts are taking hold and we are heading in the right direction,” said chairman and CEO Bill Ford. “While there is still a great deal of uncertainty in our industry, the general economic climate is improving and we are on schedule to meet or surpass our 2002 earnings milestone.”
First quarter 2002 results include a $708 million non-cash after-tax charge for the transition to a new accounting standard for goodwill (SFAS No. 142), which related to various investments in the automotive sector, and a $16 million non-cash after-tax benefit relating to the accounting standard for derivative instruments and hedging activities (SFAS No. 133).
Worldwide automotive operations lost $310 million in the first quarter, compared to a profit of $748 million year ago. Worldwide automotive revenues were $32.32 billion, compared with $34.65 billion a year ago.
Automotive gross cash at March 31 totaled $21.5 billion, including $2 billion previously funded employee benefit expenses through a Voluntary Employee Beneficiary Association trust.
The first quarter loss in North America was $430 million. Earnings in the 2001 first quarter were $754 million. The decline was a result of significantly higher marketing costs and lower production.
Ford earned $117 million in the first quarter in Europe, compared with earnings of $88 million a year ago. The increase is largely explained by the elimination of goodwill amortization due to SFAS No. 142. Continued cost reductions and other improvements offset lower sales due to declining industry and production ramp-up for the new Fiesta.
Operations in South America lost $51 million, compared with a loss of $53 million a year ago. Results from the region continue to be affected by currency devaluations and weak economic conditions in Brazil and Argentina.
Operations in the rest of the world earned a profit of $54 million, compared with a loss of $41 million in the 2001 first quarter. The improvement was primarily due to smaller losses at Mazda.
Wholly-owned rental car subsidiary Hertz reported a first quarter loss of $48 million, compared with a loss of $4 million in the first quarter a year ago. The loss was mainly attributable to lower rental volume in the U.S. resulting from a decline in travel.
“The U.S. economy is beginning to show signs of a recovery,” said president and chief operating officer Nick Scheele. “As consumer confidence increases, we are well positioned with the many new products we are in the process of bringing to market.”
