A visitor walks past a Ford Escape Titanium at the Shanghai Motor Show on April 17, 2019.
Greg Baker | AFP | fake pictures
Ford Motor performed much better than expected by Wall Street during the second quarter, even exceeding its own expectations, as the coronavirus caused continuous plant shutdowns worldwide.
This is how Ford performed against what Wall Street expected, according to analyst average estimates compiled by Refinitive.
- Adjusted EPS: A loss of 35 cents per share is expected versus a loss of $ 1.17 per share.
- Automotive revenue: $ 16.6 billion versus $ 15.95 billion expected.
Ford shares rose more than 4% during post-Thursday trading. The stock closed at $ 6.74, down 2.6%.
Ford reported an adjusted pre-tax loss of $ 1.9 billion, more than $ 3 billion better than expected.
Ford CFO Tim Stone warned investors in April that the company expected to lose more than $ 5 billion, on an adjusted pre-tax basis, during the second quarter, as the pandemic closed factories and severely hampered car sales.
Ford consumed $ 5.3 billion during the second quarter, up from $ 2.2 billion during the first quarter.
Analysts and investors were watching to see if Ford could cut those expected losses, as consumer demand in the US was stronger than expected, especially for heavy duty trucks and SUVs. The company also resumed normal shift operations at national plants one month ahead of schedule.
Wall Street was also looking at how much cash Ford burned in the quarter, as well as any guidance on paying off debts or updates to a $ 11 billion restructuring plan led by Ford CEO and President Jim Hackett.
“They have plenty of cash. They certainly won’t run out of money this year,” Morningstar analyst David Whiston told CNBC. “Ford’s problem, as they have put it in their own words, is not in good physical shape.”
General Motors, which reported its second-quarter earnings on Wednesday, said it lost $ 536 million on an adjusted basis, which was better than Wall Street expected. Without adjustment, the company lost $ 806 million and burned $ 7.8 billion in cash during the quarter.
During the first quarter, Ford lost $ 2 billion and burned $ 2.2 billion in cash.
Both Ford and GM roughly doubled their auto debt to $ 30 billion in the first quarter to help strengthen their balance sheets and overcome the Covid crisis.
GM said Wednesday it expects to pay off a $ 16 billion revolving line of credit that it withdrew in March at the end of the year.
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