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Ford posts second quarter loss

Bryce G. Hoffman / The Detroit News

DEARBORN - Ford Motor Co. posted a loss of $123 million loss for the second quarter of 2006 and suggested additional restructuring actions may be necessary.

Excluding one-time charges and special items, the company's loss from continuing operations was still $48 million, or 3 cents per share, compared to a profits of $936 million, or 47 cents per share, posted for the same period last year.

Though Wall Street has taken a dim view of Ford's turnaround efforts in recent months, the second quarter loss was much worse than most analysts had expected. They were expecting Ford to post a profit of 14 cents a share on sales of $39.6 billion according to a survey of analysts conducted by Thomson Financial Network. Ford's second quarter sales were actually a bit north of that figure at $42 billion.

"We've seen an improvement in North America results in the second quarter, but the external factors we face aren't going to get any easier," said Chairman and Chief Executive Officer Bill Ford Jr. "(Ford Americas President) Mark Fields and his team have been working on plans to accelerate their efforts. Within the next 60 days, we'll be in a position to discuss the additional actions we will be taking."

Ford moved to shore up its liquidity last week by slashing stock dividends and cutting board compensation, moves which the company said would save approximately $375 million annually. That did not stop Moody's Investors Service from cutting Ford's credit rating deeper into junk-bond territory.

Ford posted a first quarter loss of nearly $1.2 billion, attributing most of that decline to costs associated with its North American turnaround program. While Ford made $2 billion overall last year, its North American operations lost $1.6 billion and has been unprofitable for six of the last seven quarters.

The company stopped giving financial guidance to Wall Street in January, but has promised to return its North American automotive operations to profitability by 2008 - a goal more and more analysts doubt Ford can meet.

In January, Ford announced plans to shutter 14 factories and cut as many as 30,000 factory jobs in North America by 2012. The company says it is on track to eliminate between 11,000 and 12,000 hourly jobs in the region by the end of the year and expects to eliminate at least that many positions next year.
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