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Old 10-16-2003, 07:41   #1 (permalink)
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U.S.A.:Ford narrows its third-quarter loss to $25 million

By Bill Vlasic / The Detroit News

DEARBORN -- Slumping U.S. sales and restructuring charges in Europe led Ford Motor Co. to report a $25-million loss in the third quarter of the year.

Ford said Thursday that its third-quarter revenues declined 6 percent to $36.9 billion from a year earlier due to lower sales and market share in North America.

The No. 2 automaker's would have earned a small profit except for a $56-million charge for personnel reductions at its European facilities. The company said it expects another $550 million to $600 million of expenses for the European job cuts to occur in the fourth quarter.

The company's North American operations lost $116 million in the quarter. The company said low dealer inventories were caused by the launches of its F-series pickups and minivans.

Despite the loss, Ford Chairman Bill Ford Jr. said cost-cutting and new product launches has Ford "moving in the right direction."

Ford said earnings for the full year will be 95 cents to $1.05 share from continuing operations, excluding certain items such as job-cutting expenses on Europe, compared with an earlier forecast of 70 cents.

The third-quarter loss was down from a $326 million loss in the year earlier period when Ford had a $525 million loss on the sale of the Kwik-Fit car-repair chain in the U.K.

The net loss was the first quarterly loss this year for the automaker. The company had $6.4 billion in net losses in 2001 and 2002. Through nine months, Ford had net income of $1.3 billion compared with a loss of $850 million last year.

"Core costs are being cut," Brian Bruce, director of global investments at PanAgora Asset Management, which manages $13 billion in assets, including 1.15 million Ford shares, said in an e-mail interview. "Earnings will improve going forward. This should not cause a major reaction."

Ford Motor Credit Co., the automaker's consumer-finance unit, had net income of $504 million, up from $210 million a year ago. The results reflect a lower provision for credit losses and lower borrowing costs, the company said. The Hertz rental-car unit had pretax profit of $186 million, up from $160 million a year ago.

Ford's worldwide automotive operations had a pretax loss of $609 million, compared with a loss of $618 million a year ago. The results include a pretax loss in North America of $116 million, down from $591 million a year ago, and a pretax loss in Europe of $452 million from $246 million. The European loss occurred after a pretax loss of $525 million in the second quarter.

Ford's Asia/Pacific operations had a pretax profit of $1 million compared with a loss of $49 million a year ago, and South America narrowed the pretax loss to $26 million from $243 million a year ago.

The company's Premier Automotive Group, which includes Jaguar, Volvo and other European-based luxury brands, had a pretax loss of $22 million compared with a loss of $160 million a year ago.
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Old 10-16-2003, 11:18   #2 (permalink)
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Re: U.S.A.:Ford narrows its third-quarter loss to $25 million

Ford posts small quarterly loss, sees Europe charges
Reuters / October 16, 2003

DETROIT (Reuters) -- Ford Motor Co. on Thursday posted a smaller-than-expected third-quarter net loss as profits at its credit arm rose by a surprisingly strong 71 percent and its auto business benefited from cost cuts.

Ford raised its full-year outlook, primarily on the strength of Ford Credit, even as it warned it will take up to $600 million in further restructuring charges for its ailing European auto business. It also said it was committed to achieving break-even results in its auto business, a key metric for the company's credit rating.

Both Ford and General Motors' earnings, which were released on Wednesday, showed how much the two Detroit auto giants rely on their lending arms, while they cut costs and losses amid a bruising price war in the United States and Europe.

Ford, the world's second-largest automaker said it had a net loss of $25 million, an improvement of $301 million from the same quarter a year ago.

Excluding a $264 million charge from a change in accounting standards, Ford said it earned $237 million. Ford had told analysts to expect a loss of 15 cents a share before one-time charges, and most had expected Ford to beat its estimates, but none had predicted an operating profit.

Ford Chief Financial Officer Don Leclair said the surprise came from Ford Credit and automotive cost cutting. Low interest rates, investment returns and lower provisions for credit losses boosted Ford Credit's profits by 71 percent, to $504 million.

Ford's automotive unit lost $609 million before taxes, a slight improvement from a year ago, even as revenues declined. Ford said it cut $800 million in costs during the third quarter, through actions such as lower reserves for recalls.

Analysts said while Ford's earnings were surprising, investors might question whether they were repeatable. The company's shares, which had approached a 52-week high over the past few weeks, were up 8 cents at $12.22 in midday trading on the New York Stock Exchange.

"We continue to believe that Ford is in a tough spot between GM and the Japanese, but management is doing an impressive job of limiting the damage," said Merrill Lynch analyst John Casesa.

CONTINENTAL DIVIDE

After reporting a surprising $525 million loss in the second quarter, Ford Europe reported a pretax loss of $452 million in the third quarter, results Leclair called "unacceptable." The company blamed the drop on declining prices, currency exchange rates and a reduction in dealer stock.

Ford said it would take European restructuring charges of between $550 million and $600 million in the fourth quarter, in addition to $56 million in restructuring charges taken in the third quarter.

Those moves include 6,700 job cuts, such as previously announced moves to shed 3,000 workers at its plant in Genk, Belgium, and cut 1,700 jobs at its German offices.

Ford Europe executives had vowed the unit will turn a profit in the fourth quarter as it rolled out new models. But Leclair predicted the unit will have earnings of $20 million to a loss of $30 million before taxes in the fourth quarter.

"We're going to strive very hard for a break-even," Leclair said. "Hopefully we'll end up on the plus side in the fourth quarter."

Ford's key North American automotive business lost $116 million, compared with a profit of $591 million in the same period a year ago, as production fell 17 percent due to the ramp-up of new pickups and minivans.

Ford's South America and luxury Premier Automotive Group units reported small losses, while its Asia-Pacific business earned $1 million.

Ford raised its full-year earnings guidance from 70 cents a share to a range of 95 cents a share to $1.05 per share excluding special items, roughly in line with analysts' fourth-quarter forecasts. It also said it expected to cut more than $3 billion in automotive costs this year, about $500 million more than its previous estimates.
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Old 10-17-2003, 07:15   #3 (permalink)
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Re: U.S.A.:Ford narrows its third-quarter loss to $25 million

Ford's profit picture brighter

Automaker on track to earn $1.8 billion in '03
October 17, 2003
BY JAMIE BUTTERS
FREE PRESS BUSINESS WRITER

Ford Motor Co. sparked a rally in automotive stocks Thursday when it released profit figures that surpassed Wall Street's expectations and said it would end 2003 in better financial shape than it originally projected.

The Dearborn automaker still lost $25 million during the third quarter, but that was a lot better than the $200 million it was expected to lose.

Overall, Ford expects to earn $1.8 billion for the year.

The reasons: record profits at its lending arm, Ford Credit, and big-time cost-cutting in Europe and North America.

Unlike General Motors Corp., which has a giant mortgage company in GMAC, Ford Credit deals only in automotive-related business, such as insurance and financing.

In the July-to-September quarter, Ford Credit earned a record $809 million before taxes -- $504 million after taxes.

This helped to offset pretax losses of $609 million from Ford's continuing automotive operations.

To cope with no-interest loans and other price-cutting promotions, Ford has spent just about the whole year cutting costs.

Heading into the year, Ford said it aimed to cut $500 million from its ongoing expenses. It has now cut $2.7 billion, and aims to exceed $3 billion in trims by the end of 2003, executives said.

Thanks to all of that cutting -- including 6,700 jobs in Europe and more than 3,000 in North America -- Ford has maintained a razor-thin automotive profit of $53 million through three quarters, $109 million if you don't count a onetime charge from layoffs in the United Kingdom.

"Since the revitalization plan was put together, it was a much, much tougher environment than we planned on. . . . Unfortunately, tough conditions sometimes require tough choices, like the restructuring actions we recently announced," said Don Leclair, Ford's chief financial officer.

Analysts are watching closely to see whether Ford can turn a profit from the manufacturing and wholesaling of cars and trucks. It is a key indicator of whether Ford can meet its goal of earning $7 billion before taxes by 2005 or 2006. Just as important, leading credit-rating agency Standard & Poor's Corp. has warned that it may cut Ford's rating -- currently only two notches above junk status -- if it loses money on cars and trucks this year.

Leclair said the appropriate number to use is the one that excludes onetime charges.

S&P is "still in the process of assessing" whether to exclude the onetime items, said Gregg Stein, a spokesman for the agency.

Either way, Ford has a chance to meet the break-even goal, having made it through the launch of the redesigned F-150 pickup and the traditionally weak third quarter, when plants shut down for summer break.

"We continue to believe that Ford is in a tough spot between GM and the Japanese, but management is doing an impressive job of limiting the damage," industry watcher John Casesa of Merrill Lynch wrote in an e-mail.

But the big moneymaker for Ford continues to be Ford Credit, whose net profits rose to a record $504 million from $294 million in the third quarter of 2002, thanks to a lower provision for credit losses and lower borrowing rates.

Ford Credit paid an average of 4.1 percent when it borrowed money in the third quarter, down from 5.1 percent in same months of last year, saving $307 million before taxes.

"It is helping us at the moment. There's no denying that," said David Cosper, Ford Credit's chief financial officer.

Ford has been more conservative this year about taking one-time charges -- expenses that it wants investors to believe won't be repeated -- but it took more than $300 million in charges this quarter and at least $500 million more are on the way.

Between $550 million and $600 million in charges are expected in the fourth quarter and the first half of 2004, as Ford cuts the third shift at its Genk, Belgium, plant and eliminates 6,200 jobs elsewhere in Europe.

Setting aside that charge and the onetime items in the third quarter, Ford expects to earn about $1.8 billion for the year.

Earlier, it had said it would earn about $1.25 billion for the year, without onetime charges.

However, Ford's new projected profits -- before onetime charges -- are 10 percent less than what Nissan Motor Co. says it earned in half a year.

Late Wednesday, the Japanese automaker announced that in the first half of fiscal 2003, it generated a net profit of $2 billion. That's down a little from the previous year, when Nissan sold a plant and enjoyed lower tax rates.

On the backs of those two releases, almost all auto industry stocks were up.

Nissan's U.S. shares rose 29 cents, or 1.2 percent, to $23.89. Shares of other automakers,including GM to Fiat were all up, as were most suppliers.

Ford shares rose 20 cents, or 1.7 percent, to finish Thursday at $12.34. That left the shares only 19 cents below Ford's 52-week high.
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My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.

My next Ford.....
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