Ford surprises with $100 million net income in Q1
Ford Motor Company had a first quarter that was much better than analysts expected. It recorded in its ledger a net income of $100 million, which compares favorably to the $282 million it lost during the same quarter last year. Revenue fell 8% to $39.4 billion, but that doesn't include the sale of Jaguar / Land Rover. Of course, market's outside the U.S. are what helped Ford the most, with South America, Ford Europe and the Asia Pacific Africa regions all contributing to the cause. But Ford's home market in North America didn't do as much damage to the bottom line as analysts thought it would. Here in the U.S., Ford reported a pre-tax loss of $45 million, which is a major improvement over the $613 million lost last year. Most of that improvement is due to cost-cutting measures that saved the automaker $1.2 billion and includes not only reducing the volume of cars produced, but also reducing the workforce. Ford has already offered buyouts to 54,000 UAW workers, and going forward plans to offer targeted buyouts to specific plants and workers building specific vehicles. Ford also shaved 20,000 vehicles off of the total number of vehicles it plans to build in Q2 2008, bringing the number down to 710,000 or 101,000 fewer cars than Q2 2007.
Ford is clearly prepared to shrink its way to profitability, and that's fine as long as the fewer vehicles it does build connect with consumers. Just like GM's strategy is to dig itself out of a fiscal hole on the popularity of new products, so must Ford wow us with some incredible cars. The Flex, 2010 Mustang, Fiesta, next-gen Focus, redesigned Taurus... you're on.
[Source: Reuters]
Reader Comments (Page 1 of 2)
Chris 12:42PM (4/24/2008)
I wish they would focus on making cars they can sell instead of surviving on selling less cars. What kind of business sticks around for a long time when its focus is on being smaller and selling less?
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StickShift 12:46PM (4/24/2008)
A business that suffers from excess infrastructure and products that have less demand than production. By shrinking to a size the market can support the company can cut losses and put their money into making quality cars the market wants.
PJ 4:11PM (4/24/2008)
"What kind of business sticks around for a long time when its focus is on being smaller and selling less?"
Honda.
phil 12:43PM (4/24/2008)
Kicking myself for not buying their stock when it was at 5.
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Ford Wannup 12:47PM (4/24/2008)
heck...kicking myself for setting the buy limit too low (at 7.95) this morning during the conf. call.
john 12:52PM (4/24/2008)
It will be a net loss next quarter. Unless they sell off mercury maybe?
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MasterCKO 1:26PM (4/24/2008)
except the sale of Jag and LR isn't counted in here or weren't you reading the same article as I was?
Chris 2:29PM (4/24/2008)
Cant sell Mercury.
Mercury=rebadged Fords.
Schmeltz 1:00PM (4/24/2008)
Glad to hear this news---good for Ford! There's a lot of inertia in a large company like this. A turnaround is a slow process. Just glad to see them making some positive progress. Let's hope they can keep it up.
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MasterCKO 1:26PM (4/24/2008)
I agree. Making their way to real profitability. I like it. Damn, I should have bought their stock at 6.
Brent 1:04PM (4/24/2008)
Great job, Ford!
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Tool 1:22PM (4/24/2008)
It's really amazing that Ford is the strongest of the Detroit 3--at least financially. The product line-up is terrible with mostly badge-engineered vehicles.
BUT I do give Mulally and gang props for keeping it low-key and producing some tangible results. This new Drive One campaign has some real potential and Jim Farley may have been the best hire that Ford has made in decades.
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MasterCKO 1:28PM (4/24/2008)
behind Mulally, that is. 8^)
cowbell 1:28PM (4/24/2008)
I was just blown away to learn Jim Farley is Chris Farley's cousin.
Patate 1:29PM (4/24/2008)
Do you live under a rock? Edge-Fusion-F Series are very profitable and good products.
Mr. Oak 2:59PM (4/24/2008)
Matt: By your standard, Airbus should just commit Hari-Kari, because Boeing still dominates them.
Camry sells more because there are lots more uninformed folks that still believes that Toyota makes a better product.
Take a look at GM for example they do not have a single model that outsells the Camry (yet), but they still sell more cars in this market segment than either Toyota or Honda.
Honda and Toyota each have a single entrant in this segment, GM has 5, all good cars.
The Impala, Malibu, Aura, G5 and Lucerne. Not sure if the G8 belongs in this segment. I it like that GM gives 5 or 6 flavors to choose from.
PJ 4:10PM (4/24/2008)
The Fusion is most definitely a good product. The interior *styling* lacks polish, but fit and finish are little worse than an Altima's, and it's one of the best-handling and -steering cars in its class. And a loaded V6 rings in right around $20K. A great budget purchase.
What frustrates me is how many of Ford's best cars are also its slowest sellers. The Five Hundred/Freestyle/Taurus/X were fabulously space-efficient and comfortable cars. They were just style-free and undermarketed. The Fusion doesn't sell a whole lot better.
Matt 2:25PM (4/24/2008)
"Patate:
Do you live under a rock? Edge-Fusion-F Series are very profitable and good products."
Right...thats why the Camry pretty much quadruples the Fusion sales month after month after month.
And I wouldn't exactly call the good products either. The interior on ALL of those models have extremely low quality materials...the only manufacturer that has worse interiors is Chrysler.
Brian 1:41PM (4/24/2008)
As a shareholder, I received the proxy voting packet from Ford this week. On the inside cover of the financial info book was a photo containing the US Fusion and the US Focus along with the new Fiesta *hatchback*.
I hope that means we're getting it here!
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Austin 6:12PM (4/24/2008)
Show us pics please