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Ford yesterday capped the worst year in its 103-year history with a wider-than-expected fourth-quarter loss and said it would cut production this quarter and lose market share until September.
The No 2 United States vehicle maker posted a fourth-quarter net loss of almost US$5.8 billion ($8.4 billion), or US$3.05 a share, on falling truck sales and charges for staff buyouts, compared with a loss of US$74 million, or US4c a share, a year ago.
The loss from continuing operations was US$1.10 a share, wider than the Wall St expectation of US94c.
For the full year, Ford posted a record loss of US$12.7 billion, leaping past its previous record net loss of US$7.39 billion in 1992 when the industry was reeling from the aftermath of a recession in the US economy.
Ford, like its Detroit rivals, was hit hard last year as high petrol prices and interest rates drove consumers away from the trucks and sport utility vehicles that had accounted for most of its sales and profits.
"The Explorer and F-Series were both down significantly, and those were high-volume products with the best margins in Ford's portfolio," said Argus Research analyst Kevin Tynan.
Ford shares rose US12c to US$8.32 in midday trade on the New York Stock Exchange. Its bonds also gained.
Chief executive Alan Mulally told analysts Ford was slightly ahead on its restructuring plan. "We recognise the position we are in and we are taking the appropriate steps to confront the issues we are facing."
Despite its record loss, analysts said Ford had burned through less cash in its troubled car operations than expected in the past quarter, an outcome some called encouraging.
"For the foreseeable future, the Ford story is less about quarterly [earnings] and more about liquidity, cash flow, and restructuring," Bear Stearns analyst Peter Nesvold said.
Ford's car operations burned through US$1.8 billion in cash in the fourth quarter, less than the US$3 billion Nesvold said he had expected.
JPMorgan analyst Himanshu Patel also said that while analysts might lower 2007 forecasts for Ford after the fourth-quarter result, the "market may be comforted by what seems like a better-than-expected cash burn".
Ford, which is in the early stages of a four-year turnaround plan that includes closing 16 plants and cutting up to 45,000 jobs, said charges reduced fourth-quarter results by US$3.7 billion after taxes, or US$1.95 a share.
Ford said its US market share would fall through the third quarter. It ended last year with a market share of just over 17 per cent. It also said production would be down through the first half but rise year-over-year in the second half.
- REUTERS
