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Old 11-02-2009, 12:18 PM   #1
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Ford to be "Solidly Profitable" in 2011

Ford Gains while Rivals Faulter
OCTOBER 26, 2009.
Ford Gains While Rivals Falter
Car Maker Is Closer to Turning a Profit as its Market Share Rises
Ford Motor Co. has weathered the car industry's downturn better than many competitors. Now some analysts think the company has turned the corner so far it could report break-even results for its core North American operations or even an overall profit when it releases third-quarter earnings Nov. 2.

At the heart of Ford's relative success has been its ability to minimize its year-over-year sales declines while taking advantage of its competitors' weakness and grabbing market share.

According to CNW Marketing Research, Ford gained more than five percentage points of U.S. retail market share in the third quarter compared with the ... [/end of available text]
Ford Gains While Rivals Falter -

The Thread's Headline:
Ford reports surprise $1 billion profit
Automaker now expects to be ‘solidly profitable’ in 2011

David Zalubowski / AP
updated 2 hours, 3 minutes ago

Ford Motor Co. earned $1 billion in the third quarter, fueled by U.S. market share gains, cost cuts and the government's Cash for Clunkers rebates.

DEARBORN, Mich. - Ford, the only Detroit automaker to dodge direct government aid and bankruptcy court, surprised investors with net income of nearly $1 billion in the third quarter and forecast a "solidly profitable" 2011.

The automaker said Monday earnings were fueled by U.S. market share gains, cost cuts and the Cash for Clunkers program, which drew flocks of buyers to showrooms this summer. Ford's shares rose 68 cents, or 9.8 percent, to $7.68 in morning trading.

The latest results signal that Ford's turnaround is on more solid ground. The company lost more than $14.6 billion last year and hasn't posted a full-year profit since 2005. While it made a profit in the second quarter, that was mainly due to debt reductions that cut its interest payments.

Ford, based in Dearborn, Mich., reported third-quarter net income of $997 million, or 29 cents per share. Its profit forecast for 2011 was a step above previous guidance of break-even or better for the year.

Ford's key North American car and truck division posted a pretax profit of $357 million, the division's first quarter in the black since early 2005. Ford cited higher pricing, lower material costs and increased market share for the improvement.

Excluding one-time items, Ford earned 26 cents per share, blowing away analysts' expectations of a loss of 12 cents.

The earnings came despite an $800 million revenue drop. But Ford said it cut costs by $1 billion during the quarter, accomplished through layoffs in North America and Europe, reduced pension and retiree health care costs and improvements in productivity and product development.

Chief financial officer Lewis Booth said the company took in $1.3 billion more than it spent in the quarter, an improvement over its $1 billion cash burn in the second quarter.

"That's a huge deal," Booth said.

Ford's plan to create demand and get better prices for its products, coupled with cost cuts, gave the company confidence that it will make money in 2011, Booth said.

But Ford still faces obstacles in its turnaround. Last week, workers overwhelmingly rejected an agreement with the United Auto Workers that would have brought Ford's labor costs in line with rivals General Motors Corp. and Chrysler LLC. Workers objected to clauses limiting their right to strike and freezing entry-level wages, and felt the company was healthy enough and didn't need further concessions.

The rejected deal also would have changed rules so skilled tradesmen such as electricians and pipefitters work in teams and perform more than one task.

Rejection of the deal isn't likely to place Ford at an immediate cost disadvantage to its crosstown rivals because savings from the concessions are longer-term, said Gary Chaison, a professor of labor relations at Clark University in Worcester, Mass. Neither the company nor the UAW has released any cost savings numbers.

The third-quarter profit makes it extremely unlikely that the company will push to head back to the bargaining table before the current UAW contract expires in the fall of 2011, and union leaders also are unlikely to take another deal to the membership, Chaison said.

"I think the company has no credibility asking for concessions now, and I think the leadership is quite embarrased for making a case for concessions," he said.

Chaison said Ford could make some noise about moving new vehicle production to Canada, where unionized workers on Sunday approved a package of concessions, but it's more likely that Ford will live with the current contract until 2011.

The other area where Ford has a cost disadvantage is debt. Ford reported $26.9 billion in debt, up $800 million from the second quarter.

The company avoided the same fate as rivals Chrysler and GM by mortgaging its factories and even the familiar blue oval logo to borrow $23.5 billion before credit markets froze last year.

Ford didn't quantify the impact of Cash for Clunkers, which offered buyers rebates to trade in their vehicles. The program helped Ford cut costly incentives and raise production.

It also won buyers; the fuel-efficient Ford Focus sedan and Ford Escape, a small SUV, were among the top five sellers under clunkers. Ford sales climbed 17 percent in August thanks to the program.

Ford's revenue fell $800 million for the quarter, to $30.9 billion, due mainly to its financial services arm, Ford Motor Credit, making fewer loans.

But the division still posted a pretax profit of $677 million, and revenue from auto operations rose slightly to $27.9 billion.

Ford also has benefited from consumer goodwill after it declined government bailout money and didn't go into bankruptcy over the summer as GM and Chrysler did. Ford grabbed sales from its rivals, posting the largest increase in market share of any automaker in September. Ford expects an overall gain in U.S. market share in 2009, a feat it hasn't accomplished since 1995.
Ford reports surprise $1 billion profit - Autos-

Originally Posted by MetallicMist View Post
OsirisGuy is correct
Originally Posted by stangaroo View Post
OsirisGuy is right
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Old 11-02-2009, 06:22 PM   #2
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Re: Ford to be "Solidly Profitable" in 2011

saw this this morning. great news.

so, who are the lucky bastards that bought ford stock when the markets tanked?


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Old 11-03-2009, 03:12 AM   #3
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Re: Ford to be "Solidly Profitable" in 2011

Originally Posted by wiarumas View Post
so, who are the lucky bastards that bought ford stock when the markets tanked?
dunno, but those who didnt (like myself) are kicking themselves in the nads right now.

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Old 11-03-2009, 10:13 AM   #4
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Re: Ford to be "Solidly Profitable" in 2011

if they can get the UAW to actually take some cuts as they should compared to GM and such they can make some profit... but according to the UAW if ford makes 1 dollar profit then thats enough for them to say they dont need to take any cuts... just a way to bleed the company of money until Ford also has to go into bankruptcy to get rid of the low lifes.
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