Ford Motor Swings to First-Quarter Loss on 15% Lower Revenue

Ford Motor, hurt by the coronavirus along with the entire auto industry, swung to a first-quarter loss on 15% lower revenue.
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Ford Motor  (F) - Get Report swung to a first-quarter net loss from a year-earlier profit on 15% lower revenue.

The Dearborn, Mich., auto giant reported a loss of $1.99 billion, or 50 cents a share, for the quarter compared with a profit of $1.15 billion, or 29 cents, in the year-earlier quarter. The latest adjusted loss was 23 cents a share.

A survey of analysts by FactSet had estimated that Ford would post a loss of 8 cents a share on revenue of $34.69 billion.

But the company had telegraphed the results on April 17, saying then that it estimated a loss of about $2 billion in the quarter on revenue of about $34 billion.

Ford Credit earned $30 million before taxes in the quarter, compared with $801 million a year earlier. 

In that unit, “strong portfolio performance was offset by about $600 million from increased credit-loss reserves, and higher depreciation on off-lease vehicles awaiting sale and anticipated operating lease defaults -- all reflecting estimated impact of the coronavirus in future periods,” the company said in a statement.

The car industry has been hammered by the national lockdown resulting from the coronavirus. The automakers had shut down their plants in March.

And Barron's last week reported that used-car prices, benchmarked by the Manheim Used Vehicle Value Index, have also plunged.

But Ford said on Tuesday that it would resume auto production in Europe on May 4.

And late Monday The Wall Street Journal reported that the Big Three carmakers, after speaking with leadership of the United Auto Workers union and with the office of Michigan Gov. Gretchen Whitmer, are targeting May 18 to resume some production at their U.S. factories.

The companies and the union are drawing up safety protocols to reduce the risk of exposure for workers, the Journal reported.

In the first quarter, Ford's overall sales declined 12.5%. Sales fell 5.4% in trucks, 11% in SUVs, and 36% in sedans. Ford has been gradually phasing out production of sedans.

At last check Ford shares were trading down 6.5% at $5.03. They closed the regular session Tuesday up 4.1% at $5.38. 

GM  (GM) - Get Report shares recently were trading down 0.3% at $22.12 while Fiat Chrysler  (FCAU) - Get Report  shares were unchanged at $8.48.