Ford surprises with first quarter results
Analysts were expecting Ford (F) to report a $1.24 a share loss for the first quarter of 2009. Few guessed that it would come in at less than half that amount. In these disastrous days for the auto industry, reporting a loss of only $.60 a share, or $1.4 billion, seems like a victory worthy of a parade.
The news is positive especially in light of what's going on with the other (no longer so big) two American automakers. The smaller than expected loss means that Ford's war chest, now at $21.3 billion, can be expected to carry the company further through a long recession. Ford also reiterated that it does not intend to look to the federal government for a bridge loan.
The company paid down $2.4 billion of debt in the quarter, with the remaining part of the planned $10.1 billion pay down to fall in the second quarter financials. On the down side, the company took a $700 million hit when forced to account for the difference between Volvo's book and market values. Worldwide, vehicle sales fell from 1.531 million in the first quarter of 2008 to 973,000.
The company has more cost-saving plans underway, including a negotiated modification of its UAW contract which will trim half a billion dollars a year from the company's costs, a new buyout program to reduce the number of employees, and an agreement allowing it to fund part of its retirement fund obligations with company stock. The possible sale of Volvo is still on the front burner, as well.