Ford Rises on Strong Earnings Beat; May 'Break Even' Before Charges in '07

Nov. 8.07 | About: Ford Motor (F)

Ford Motor Company reported a significantly narrower quarterly loss Thursday morning, and nearly broke even on an adjusted basis, topping analyst estimates and sending shares higher by 4.85% in pre-market trading (as of 7:36 AM ET). Ford reported a Q3 net loss of $380 million, good for EPS of -$0.19, versus a loss of $5.2 billion (EPS of -$2.79) in the prior-year period. Total revenue, including revenue from its finance arm, Ford Credit, was up 11.7% Y/Y to $41.1 billion. Wednesday, top U.S. rival General Motors reported 'record' revenue of $43.1 billion amid a one-time loss of $39 billion (full summary).

The company, which is in the midst of a major overhaul of its business, as it attempts to again become profitable, said adjusted earnings from continuing operations were -$24 million, good for EPS of -$0.01. On that basis, the company lost $0.45 cents a share a year earlier. Consensus analyst estimates were for an adjusted EPS loss of $0.46-$0.48 on revenue of $33.46 billion. Ford CEO and President Alan Mulally called his company's latest performance "very encouraging," adding, "We can see our [restructuring] plan taking hold with significant improvement continuing in our core Automotive operations," (full earnings call transcript later today). Profitability may not be all that far away: Ford said it expects "Full-year pre-tax results excluding special items to be in the range of a small loss to breakeven" with significant "substantial year-over-year improvement in fourth-quarter results."

On the labor front, Ford laid off 6,500 workers in North America during Q3 as part of its restructuring. The company recently concluded a four year agreement with the United Auto Workers union (full summary).

Ford saw its monthly sales decline for the 12th straight month in October (full summary). The company said it expects to sell off luxury brands Jaguar and Land Rover by early 2008 (full summary).

In related news, Ford and Daimler announced they had agreed to swap 34.3 million shares in Canada's Ballard Power Systems worth approximately $168 million in exchange for Ballard's automotive fuel cell business. Ballard will cancel the shares upon receipt.

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