Signage is displayed outside the idled Ford Motor Co. Michigan Assembly plant in Wayne, Michigan, U.S., on Monday, March 23, 2020.
Anthony Lanzilote | Bloomberg | Getty Images
Ford Motor lost $2 billion during the first quarter and warned investors that losses during the second quarter will widen as the company grapples with the fallout from the coronavirus pandemic that’s shuttered factories and devastated sales.
Before taxes, and after adjusting for one-time items, Ford lost $632 million, and that number is expected to top $5 billion during the second quarter, the automaker said Tuesday.
The automaker’s total revenue, which includes auto sales and financing, slid 14.9% to $34.3 billion. The coronavirus had a “negative effect” of at least $2 billion on the company’s earnings during the first three months of the year, Ford said.
The outbreak significantly hobbled Ford’s performance, “as protecting people and helping society respond to the crisis became primary measures of current success alongside balance-sheet management and operational excellence,” the company said.
Ford burned through $2.2 billion in cash during the quarter, a number Wall Street is closely watching. Investors are also looking for updates on important product launches, such as the Ford Bronco SUV and redesigned F-150 pickup. Both were expected this year.
As of April 9, Ford said it had about $30 billion in cash on its balance sheet, including $15.4 billion of proceeds from borrowings last month against two existing credit lines.
To further strengthen its cash position, Ford sold about $8 billion in bonds earlier this month, increasing its cash position by about 27%, it said April 17.
Ford Chief Financial Officer Tim Stone previously said the company believed it had enough cash to get it through “at least the end of the third quarter with no incremental vehicle production and wholesales or financing actions.”
Automakers across the globe have been forced to conduct rolling plant shutdowns due to Covid-19. What started as a problem in China to begin the year, quickly grew to a supply base issue and then a global pandemic that shut down U.S. facilities, which remain closed.
Urged by the United Auto Workers union, Ford, General Motors and Fiat Chrysler announced plans to temporarily close their plants due to the coronavirus on March 18. Pending discussions with the union, the facilities could begin to reopen as soon as next month.
Ford on Tuesday said it plans to begin reopening its European plants next week with new global safety protocols to limit the spread of Covid-19, providing a potential template for reopening its U.S. operations.
Ford’s first-quarter vehicle sales fell 12.5% from a year ago, the company said earlier this month.
IHS Markit expects worldwide vehicle sales to decline 22% this year to 70.3 million units, led by a 26.6% fall in the U.S. to 12.5 million units, compared with a year ago.
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Published at Tue, 28 Apr 2020 20:57:27 +0000-Ford projects adjusted pretax loss of $5 billion in the second quarter