USA:Ford predicts jump in first-half profits,Decline expected for second half of 04
Ford predicts jump in first-half profits
Decline expected for second half of 2004
BY BILL KOENIG
Ford Motor Co. said Wednesday that first-half profit, excluding some costs, could almost double to $1.31 a share, but second-half profits would decline as the company gears up for new models.
"The outlook for the second half of the year appears to be difficult," chief financial officer Don Leclair told analysts at a presentation in Dearborn. The automaker also could face more price competition, he said.
Ford expects first-half profit of $1.26 to $1.31 a share, excluding some costs, an increase from 68 cents on the same basis in the year-ago period, Leclair said. Second-half earnings will be 24 cents to 29 cents, he estimated, a drop from 46 cents a year earlier.
Some new models such as the Five Hundred sedan and redesigned Mustang sports car won't reach dealerships "in much volume" until October, he said. The new models are part of chief executive officer Bill Ford's plan, announced two years ago, to generate $7 billion in pretax profit by 2006. The automaker also is cutting costs and closing plants.
"Ford has made tremendous progress but they still have a significant way to go, especially to catch the Japanese, who are leaders in cost management," said Dennis Virag, president of Automotive Consulting Group Inc.
The company's shares fell 37 cents to $14.08 in New York Stock Exchange composite trading. They have declined 12 percent this year.
The automaker is coming off first-quarter net income of $1.95 billion, or 94 cents a share, its best quarter in four years as Ford reduced costs and had record earnings from its car-loan unit. Profit rose even as the company's U.S. new-vehicle sales in the quarter fell 1.3 percent.
Ford is cutting sales to rental-car fleets, which produce losses or small profits, to focus on sales to individual buyers. It also is trying to spend less on incentives than larger rival General Motors Corp. and DaimlerChrysler AG's Chrysler Group.
The company also closed a Dearborn factory that made the Mustang and is moving production of the sports car to the Flat Rock plant it owns with affiliate Mazda Motor Corp.
Rising gasoline prices also could hurt the automaker, said Brian Bruce, head of equity investments of PanAgora Asset Management, which owns 1.06 million Ford shares. "The environment will definitely be challenging for Ford to hit their current forecast," he said in an e-mail interview.
The current national average price for a gallon of regular gasoline is a record $2.009, according to AAA. That's an increase from $1.50 a year ago.
Ford affirmed Wednesday its 2004 earnings forecast of $1.50 to $1.60 a share, excluding some costs. The company said results including costs of European job cuts and divesting "noncore businesses" would be $1.41 to $1.53 a share for the year.
In 2003, net income was $495 million, or 27 cents a share.
Ford also said North American pretax profit this year will exceed its forecast of $1.7 billion.
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.....