Ford expected to report a loss, but how bad will it be?

Vain girls learn early that their beauty is enhanced by the presence of less-attractive girls. Ford (F) has been benefiting recently from the ugly prospects of its Detroit cohorts, its stock climbing from a humiliating $1.01 to the heady altitude of more than $4 a share.

Perhaps investors are reacting to the company's decision to forgo federal bailout cash, or the favorable reviews of its new product line, or the many cost-trimming moves, or its decision to pay down debt by $9.9 billion, or the the potential for the company to steal customers from GM. Tomorrow's earning report, however, might serve to remind stockholders of the fundamental problems that aren't going away soon.

Analysts are anticipating a loss of $1.24 a share, reflecting the fact that no one expects rosy news. The results will stink; the question is, how much will they stink? Ford is still bleeding cash, and even its substantial war chest will eventually empty. Investors will be eager to see what impact layoffs, plant shutdowns, bonus cancellations, and other steps will have on the balance sheet.

The key questions going into tomorrow's earning report are how long will the auto industry gridlock continue, does Ford have the cash to ride it out, and does it have the products that will sell when people start buying again? The amount of cash it spent in the first quarter of 2009 will provide an inkling of Ford's near-term fortunes.

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