Ford Motor Co on Monday posted a quarterly loss of $5.8 billion - its largest loss in 14 years - as restructuring charges related to planned job cuts in North America and declining sales of its trucks hampered results.
Ford also said it will restate financial results from 2001 through the second quarter of 2006, citing an accounting change on interest rate derivatives used to hedge its long-term debt.
Ford shares fell 3 percent in early electronic trade. Ford, which is closing 16 plants and cutting up to 45,000 jobs in North America, recorded a net loss of $3.08 per share in the third quarter. A year ago, it posted a loss of $284 million, or 15 cents per share.
A series of charges reduced third-quarter results by $4.6 billion after taxes, or $2.46 per share. J.P. Morgan analyst Himanshu Patel said while the loss per share was smaller than he projected, the loss at Ford's Premier Automotive Group, which includes luxury brands such as Jaguar, was much worse. "We expect a modestly negative reaction," he wrote in a note for clients.
The third-quarter loss from continuing operations was 62 cents a share, matching analysts' average expectation as tracked by Reuters Estimates. The loss was its largest since the first quarter of 1992, when the automaker lost $6.66 billion, company representatives said.
"These business results are clearly unacceptable," said Chief Executive Alan Mulally, who took over at Ford in early September. "Our focused priorities are to restructure aggressively to operate profitably at lower volumes, and to accelerate the development of new, more fuel efficient vehicles that customers really want."
Ford lost $1.8 billion in its world-wide automotive operations before taxes, including a loss of $2 billion in North America, the company's main market.
Revenue totalled $36.7 billion, down $4.1 billion from the same period a year ago. The company's overall North American light vehicle production was down 12 percent in the quarter.
Auto sales were $32.6 billion, down $2.1 billion from a year earlier. Ford ended the quarter with total cash of $23.6 billion, unchanged from the end of the previous quarter.
Ford, which is in the midst of its third restructuring in five years, is offering buyouts to all of its nearly 75,000 unionised workers to reduce its factory work force by nearly one-half. The automaker also wants to reduce its white-collar US payroll by an additional 10,000 job cuts by the end of March next year.
In the quarter, Ford took pretax charges of $861 million for job cuts related to plant closings in North America, $259 million for job cuts elsewhere, and $437 million to pay out pensions earlier than planned for employee buyouts.
Ford also took pretax charges of $2.2 billion to write down the value of North American assets and $1.6 billion for the impairment of Jaguar and Land Rover assets.
Ford Motor Credit's net profit fell to $262 million from $577 million a year earlier in part because of higher financing costs driven by the automaker's junk credit rating.
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