Weight loss diet Coronavirus Drags Ford Into $2 Billion Quarterly Loss thumbnail

Weight loss diet Coronavirus Drags Ford Into $2 Billion Quarterly Loss


weight loss diet

By Steph Willems on April 29, 2020

Call it the coronavirus crash. Ford Motor Company released its first-quarter 2020 financial results late Tuesday, revealing a deep dip into the red as March’s production shutdown and and domestic (and overseas) sales dive ate into earnings.
Free cash flow was negative $2.2 billion last quarter, Ford said, as it reported a net loss of $2 billion. Recall that a big deal was made over the company’s less-than-stellar Q4 2019 earnings report, which carried the weight of recalls and a botched product launch. That report now looks rosy.
As bad as Q1 2020 looks, Ford cautioned investors to brace themselves for an even grimmer Q2.
“According to [chief financial officer Tim Stone], today’s economic environment remains too ambiguous to provide full-year 2020 financial guidance. He said the company expects second-quarter adjusted EBIT to be a loss of more than $5 billion, as year-over-year industry volumes decline significantly in every region,” the automaker stated in its report.
Ford’s pre-tax loss in Q1 2020 was $632 million, with the actual dollar figure of the coronavirus impact pegged at $2 billion. The virus cratered sales in China in mid-January, lasting into February, while the European market followed the People’s Republic into lockdown a month after the initial Wuhan outbreak. North America fell like a domino in mid-March.
Being by far the automaker’s biggest revenue generator, the lingering impact of lockdown orders in the U.S. and Canada will push the worst of the hurt into the second quarter of the year (the region’s earnings before interest and taxes last quarter was not in the red). All that said, Ford says cash isn’t a problem. The company drew more than $15 billion from credit lines and issued $8 billion in bonds to firm up its position and weather the storm.
“We’ve taken decisive actions to lower our costs and capital expenditures and been opportunistic in strengthening our balance sheet and optimizing our financial flexibility,” Stone said. “We believe the company’s cash is sufficient to take us through the end of the year, even with no additional vehicle wholesales or financing actions.”
Jim Farley, Ford’s chief operating officer, said the company’s team in China “did a very good job managing through the crisis and provided us with a valuable template for bringing back up operations in the rest of the world” — useful stuff for the automaker’s phased restart of production in Europe, scheduled to commence next week.
In the U.S., Ford is rumored to be aiming for a May 18th restart date, following a kiboshed plan to fire up only a select few plants earlier in April.
[Image: Chris Tonn/TTAC]

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