Ford Reports Preliminary First Quarter 2007 Financial Results

[Donut King]

Ford Reports Preliminary First Quarter 2007 Financial Results*

• Revenue of $43 billion.
• Net loss of 15 cents per share, or $282 million, for the first quarter of 2007.
• Loss of 9 cents per share, or $171 million, from continuing operations excluding special items.**
• Record profits at Premier Automotive Group, with improvements in all brands.
• Ford Europe, Ford South America and Mazda all profitable.
• Ford Motor Credit pre-tax profit of $294 million.
• Automotive gross cash at March 31, 2007 was $35.2 billion, including cash and cash equivalents, net marketable securities, loaned securities and short-term Voluntary Employee Benefits Association (VEBA) assets.***

DEARBORN, Mich., April 26, 2007 – Ford Motor Company [NYSE: F] today reported a net loss of 15 cents per share, or $282 million, for the first quarter of 2007. This compares with a net loss of 76 cents per share, or $1.4 billion, in the first quarter of 2006.

Ford’s first-quarter loss from continuing operations, excluding special items, was 9 cents per share, or $171 million, compared with a profit of 12 cents per share, or $223 million, in the same period a year ago.**

Special items, which primarily reflected the impact of restructuring efforts, reduced pre-tax results by $113 million, or 6 cents per share, in the first quarter.

Ford’s first-quarter revenue was $43 billion, up from $40.8 billion a year ago. The increase primarily reflected mix improvement and favorable currency exchange, partially offset by lower volume.

* The financial results discussed herein are presented on a preliminary basis; final data will be included in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2007.
** Earnings per share from continuing operations, excluding special items, is calculated on a basis that includes pre-tax profit and provision for taxes and minority interest. See table following “Safe Harbor/Risk Factors” for the nature and amount of these special items and a reconciliation to U.S. Generally Accepted Accounting Principles ("GAAP").
*** See table following “Safe Harbor/Risk Factors” for a reconciliation of Automotive gross cash to GAAP.

"We are making progress on executing the four priorities of our plan – restructuring the company, accelerating product development, funding our plan and working effectively as one team," said President and Chief Executive Officer Alan Mulally. "I am pleased that the basics of our business are improving, but we still have a lot of work to do.

"Our first quarter results came in somewhat stronger than expected, but there are many uncertainties going forward. We remain focused on improving our quality, productivity and business performance," Mulally added.

First-quarter highlights included:

• Strong performance of new U.S. products including Ford Edge, Lincoln MKX, Ford F-Series Super Duty, Ford Escape and Mercury Mariner.
• Successful public introduction of the all-new Ford Mondeo and redesigned Ford C-MAX at the Geneva Motor Show.
• Record Premier Automotive Group profits.
• Ford Europe pre-tax profits of $219 million, an increase of $154 million compared with a year ago.
• Cost savings of $500 million, $400 million of which was associated with North America – bringing total cumulative cost savings to $1.9 billion toward the 2008 target of reducing annual operating costs by $5 billion compared with 2005.
• Reduction of 18,000 personnel positions in North America.
• Sale of one ACH business during the quarter and agreement in principle reached to sell two other ACH businesses – bringing to four the total number of ACH businesses currently subject to agreements in principle for sale.
• Agreement to sell Automobile Protection Corporation (APCO) – finalized in April.
• Agreement to sell Aston Martin.
• Continued improvement in quality.

The following discussion of the results of our Automotive sector and Automotive segments/business units is on a basis that excludes special items. See table following “Safe Harbor/Risk Factors” for the nature and amount of these special items and any necessary reconciliations to GAAP.

AUTOMOTIVE SECTOR

On a pre-tax basis, worldwide Automotive sector losses in the first quarter were $225 million. This compares with a pre-tax loss of $203 million during the same period a year ago. The 2007 losses were more than explained by net interest expense, partially offset by automotive operating profits of $116 million during the quarter.

Worldwide Automotive revenue for the first quarter was $38.6 billion, up from $37 billion in the same period last year. The increase primarily reflected mix improvement and favorable currency exchange, partially offset by lower volume. Vehicle wholesales in the first quarter were 1,650,000, down from 1,756,000 a year ago.

Automotive gross cash, which includes cash and cash equivalents, net marketable securities, loaned securities and short-term VEBA assets, was $35.2 billion at March 31, 2007, up from $33.9 billion at the end of the fourth quarter.

Ford North America: In the first quarter, Ford’s North America Automotive operations reported a pre-tax loss of $614 million, compared with a pre-tax loss of $442 million a year ago. The increase in losses primarily reflected unfavorable volume and mix, partially offset by cost reductions. Revenue was $18.2 billion, down from $19.8 billion for the same period a year ago.

Ford South America: Ford’s South America Automotive operations reported a first-quarter pre-tax profit of $113 million, compared with a pre-tax profit of $137 million a year ago. The decline primarily reflected the non-recurrence of hedging gains. First quarter revenue improved to $1.3 billion from $1.2 billion in 2006.

Ford Europe: Ford Europe’s first-quarter pre-tax profit was $219 million compared with a pre-tax profit of $65 million during the same period in 2006. The improvement was more than explained by favorable volume and mix, partially offset by higher incentive spending. During the first quarter of 2007, Ford Europe’s revenue was $8.6 billion, compared with $6.8 billion during the first quarter of 2006.

Premier Automotive Group (PAG): PAG reported a record pre-tax profit of $402 million for the first quarter, compared with a pre-tax profit of $152 million for the same period in 2006. The improvement is more than explained by favorable volume and mix, favorable net pricing and lower costs, partially offset by adverse currency exchange. First-quarter 2007 revenue was $8.4 billion, compared with $7.1 billion a year ago.

Ford Asia Pacific and Africa: For the first quarter, Ford Asia Pacific and Africa reported a pre-tax loss of $26 million, compared with a pre-tax profit of $2 million a year ago. Adverse currency exchange and unfavorable volume and mix were partially offset by favorable cost performance. Revenue was $1.8 billion for the first quarter of 2007, compared with $1.7 billion in 2006.

Mazda:For the first quarter, Ford earned $22 million from its investment in Mazda and associated operations, compared with $45 million during the same period a year ago. The decline is largely explained by the non-recurrence of gains on an investment in Mazda convertible bonds.

Other Automotive: First-quarter results included a pre-tax loss of $341 million, compared with a loss of $162 million a year ago. The year-over-year decline is largely explained by higher interest expense and related costs associated with the debt increase in the fourth quarter of 2006. This was partially offset by increased interest income on a larger cash portfolio.

FINANCIAL SERVICES SECTOR

For the first quarter, Financial Services sector earned a pre-tax profit of $294 million, compared with a pre-tax profit of $375 million a year ago.

Ford Motor Credit Company: Ford Motor Credit reported net income of $193 million in the first quarter of 2007, down $55 million from earnings of $248 million a year earlier. On a pre-tax basis from continuing operations, Ford Motor Credit earned $294 million in the first quarter, compared with $382 million in the previous year. The decrease in earnings was more than explained by higher borrowing costs and higher depreciation expense for leased vehicles. The non-recurrence of losses related to market valuation adjustments from non-designated derivatives was a partial offset.

[Donut King]

Safe Harbor/Risk Factors

Statements included herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on expectations, forecasts and assumptions by our management and involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially from those stated, including, without limitation:

• Continued decline in market share;
• Continued or increased price competition resulting from industry overcapacity, currency fluctuations or other factors;
• A market shift (or an increase in or acceleration of market shift) away from sales of trucks or sport utility vehicles, or from sales of other more profitable vehicles in the United States;
• A significant decline in industry sales, particularly in the United States or Europe, resulting from slowing economic growth, geo-political events or other factors;
• Lower-than-anticipated market acceptance of new or existing products;
• Continued or increased high prices for or reduced availability of fuel;
• Currency or commodity price fluctuations;
• Adverse effects from the bankruptcy or insolvency of, change in ownership or control of, or alliances entered into by a major competitor;
• Economic distress of suppliers that has in the past and may in the future require us to provide financial support or take other measures to ensure supplies of components or materials;
• Labor or other constraints on our ability to restructure our business;
• Work stoppages at Ford or supplier facilities or other interruptions of supplies;
• Single-source supply of components or materials;
• Substantial pension and postretirement healthcare and life insurance liabilities impairing our liquidity or financial condition;
• Worse-than-assumed economic and demographic experience for our postretirement benefit plans (e.g., discount rates, investment returns, and health care cost trends);
• The discovery of defects in vehicles resulting in delays in new model launches, recall campaigns or increased warranty costs;
• Increased safety, emissions (e.g., CO2), fuel economy or other (e.g., pension funding) regulation resulting in higher costs, cash expenditures, and/or sales restrictions;
• Unusual or significant litigation or governmental investigations arising out of alleged defects in our products or otherwise;
• A change in our requirements for parts or materials where we have entered into long-term supply arrangements that commit us to purchase minimum or fixed quantities of certain parts or materials, or to pay a minimum amount to the seller ("take-or-pay" contracts);
• Adverse effects on our operations resulting from certain geo-political or other events;
• Substantial negative Automotive operating-related cash flows for the near- to medium-term affecting our ability to meet our obligations, invest in our business or refinance our debt;
• Substantial levels of Automotive indebtedness adversely affecting our financial condition or preventing us from fulfilling our debt obligations (which may grow because we are able to incur substantially more debt, including additional secured debt);
• Inability of Ford Credit to access debt or securitization markets around the world at competitive rates or in sufficient amounts due to additional credit rating downgrades or otherwise;
• Higher-than-expected credit losses;
• Increased competition from banks or other financial institutions seeking to increase their share of financing Ford vehicles;
• Changes in interest rates;
• Collection and servicing problems related to finance receivables and net investment in operating leases;
• Lower-than-anticipated residual values or higher-than-expected return volumes for leased vehicles; and
• New or increased credit, consumer or data protection or other regulations resulting in higher costs and/or additional financing restrictions.

We cannot be certain that any expectation, forecast or assumption made by management in preparing forward-looking statements will prove accurate, or that any projection will be realized. It is to be expected that there may be differences between projected and actual results. Our forward-looking statements speak only as of the date of their initial issuance, and we do not undertake any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events or otherwise. For additional discussion of these risks, see "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2006.



edit: tables didn't turn out so well so i've removed them

[sleekism]

What about Ford Australia????????

[Tote]

Looking at those numbers give a real perspective on how important Ford Aus is in the grand scheme of things, I assume we're buried in "Asia Pacific" somewhere...
Regards,
Tote

[brodfloyd]

Just an interesting point i thought i might raise:

now, figures are approx, i know some countries are missing and i did most of the calculations in my head or with windows calculator during my lunch hour, so SOOOORRRRY if im wrong, but i tried my best. and even if mostly wrong the point remains. :P

ford asia pacific (ford, aus, nz, thailand, india and south africa, China? etc) makes an after tax loss of $26 Million

PAG total revenue = $8.4 Billion (using US 'billion' ie 1B = 1000 million not 1 million million; meaning 8,400 million)

Ford asia pacific after tax loss as a pecentage of PAG total revenue 0.3%


Ford asia pacific total revenue = $1.7 Billion (dont forget mazda isnt counted here)
Ford North America Total Revinue =$18.2 Billion

Ford AP Total rev as a percentage of Ford NA = 10.7%

USA population = 301 Million

Canada Population - 32 Million

North American Population = 333 Million (half of the mark of the beast)

Australia= 20 Million People

NZ= 4 Million People

Thailand= 62 Million People

South Africa= 47 Million People

India= 1,126 Million People

China= 1,317 Million People

Total Asia Pacific* Population = 2.576 Billion People

Gives me some perspective on why we waited years for the focus, xr5, mondeo and why it has felt like the falcon has mattered stuff all to the head honcho's in the states in times past.

we are really really lucky to have the falcon, and if Ford globally use our car, amazing, considering the constraints it is designed and built under as illustrated by these figures.

Now, dont take this the wrong way australians, as i am one, and i love this place, but........... As a country we have a habit of thinking we matter more than we do on the world stage, possibly because we tend to punch above our weight in alot of areas (sport 10+ olympic gold medals with a pop of 20 mil is amazing, war we have about 1500 personal in iraq, do a bloody good job, but in reality the yanks have had 200 or 300 thousand i think?, entertainment rusty, bana etc). but one thing we cant punch above our weight with unfortunatly is population and GDP and how they hence affect the automotive industry.

However the USA is the inverse case, as with only a population of .3 billion people, they can out generate the revenue created by 2.5 billion people on ford automobiles at a rate of pretty much 10:1.

makes me realise how lucky we are to have any form of local car industry, let alone 4 car makers. which does go some way to prove that we are a very much smaller economy of scale with the us.

And to think, even with all the BOOM growth in India and china the revenue for ford is still so so, i was a bit disapointed by it really.



can anyone tell i took politics and international relations at uni??

I saw a data table yesterday from 1980's, it had the GDP's of countries and the revenues of the worlds biggest multinationals displayed together. on the list GM was 24th and ford was about 50ish. That means only 24 countries in the world at that time had a GDP bigger than GM's yearly turnover. Amazing. Surely things will have changed to a degree, but its more likely evolution not revolution. You can see why even with them bleeding money how an economy like the USA could not afford to lose them.

anyway, im done. hope others find it as interesting as i did reading it.

and its a change from my usual post whoring.

[Dave_au]

Originally Posted by brodfloyd

can anyone tell i took politics and international relations at uni??

You could have fooled me.

[brodfloyd]

Originally Posted by Dave_au

You could have fooled me.

is that a put down? come on, play nice.

please explain tho.

[vztrt]

Pretty much the loss in Fora Asia pacific and south africa would be because of Ford Oz. Last years profit was hindered by FoA.

[brodfloyd]

yes, but by the same token, FoA does alot more engineering and development than other countries in our region.

[vztrt]

Pointless if the cars aren't selling. If you look at it that way than you should close the manufacturing down and just engineer cars here...........unfortunately this will eventually happen.

[sleekism]

For such a small country Australia sells a lot of Falcons 20 million :roughly 50,000
If USA sold the same proportion it would be 750,000 cars.

750,000!!!!!!

That is more than their Fusion, 500 and Mustang combined!!

[Gobes32]

Originally Posted by sleekism

For such a small country Australia sells a lot of Falcons 20 million :roughly 50,000
If USA sold the same proportion it would be 750,000 cars.

750,000!!!!!!

That is more than their Fusion, 500 and Mustang combined!!

They used to sell that many F series each year. Not any more.

[majin_andrew]

Originally Posted by brodfloyd

is that a put down? come on, play nice.

please explain tho.

Don't worry, I think he was being sarcastic.
ie: "Of course we can see you took politics and international relations at uni."

[XR Martin]

Originally Posted by acosta32

They used to sell that many F series each year. Not any more.

No they sell about 900,000 F-series a year.

[Fordman1]

Originally Posted by vztrt

Pretty much the loss in Fora Asia pacific and south africa would be because of Ford Oz. Last years profit was hindered by FoA.

Ford Australia made a profit last year didn't they ? I think they'll lose money this year though.

It will be critical for Ford Australia to make a profit next year I would imagine with the current financial situation in the US and Orion being launched.

Interestingly Holden lost money in 2005 and will announce a loss for 2006 too !!

[Fordman1]

Originally Posted by acosta32

They used to sell that many F series each year. Not any more.

It was 939,000 in 2004 (record) & 796,000 last year (900,000 in 2005).

And 2006 was a bad year !! They still love their trucks don't they ?

[Dave_au]

Originally Posted by brodfloyd

is that a put down? come on, play nice.

please explain tho.

Nah not really, just a cheeky remark :P You left yourself open.

[vztrt]

Originally Posted by Barraxr8

Ford Australia made a profit last year didn't they ? I think they'll lose money this year though.

It will be critical for Ford Australia to make a profit next year I would imagine with the current financial situation in the US and Orion being launched.

Interestingly Holden lost money in 2005 and will announce a loss for 2006 too !!

First quarter Ford Asia Pasific and South Africa made a 2 million doller profit with FoA taking alot of the profit away because of the falcon and the territory (the year before FAPSA made 52million first quarter).

By the end of the year FoA did alot of downsizing to fix this problem but they are still struggling. Hopefully Orion turns this around but if Holden did make a loss as you say than Ford will be very worried. Than again with what Ford have been doing with Orion they may actually be on the ball.

[sleekism]

I heard that Holden actually lost money on the Monaros they sold to the USA and that Ford Oz makes more profit per vehicle..............

[YOOT]

Originally Posted by brodfloyd

Just an interesting point i thought i might raise:

now, figures are approx, i know some countries are missing and i did most of the calculations in my head or with windows calculator during my lunch hour, so SOOOORRRRY if im wrong, but i tried my best. and even if mostly wrong the point remains. :P

ford asia pacific (ford, aus, nz, thailand, india and south africa, China? etc) makes an after tax loss of $26 Million

PAG total revenue = $8.4 Billion (using US 'billion' ie 1B = 1000 million not 1 million million; meaning 8,400 million)

Ford asia pacific after tax loss as a pecentage of PAG total revenue 0.3%


Ford asia pacific total revenue = $1.7 Billion (dont forget mazda isnt counted here)
Ford North America Total Revinue =$18.2 Billion

Ford AP Total rev as a percentage of Ford NA = 10.7%

USA population = 301 Million

Canada Population - 32 Million

North American Population = 333 Million (half of the mark of the beast)

Australia= 20 Million People

NZ= 4 Million People

Thailand= 62 Million People

South Africa= 47 Million People

India= 1,126 Million People

China= 1,317 Million People

Total Asia Pacific* Population = 2.576 Billion People

Gives me some perspective on why we waited years for the focus, xr5, mondeo and why it has felt like the falcon has mattered stuff all to the head honcho's in the states in times past.

we are really really lucky to have the falcon, and if Ford globally use our car, amazing, considering the constraints it is designed and built under as illustrated by these figures.

Now, dont take this the wrong way australians, as i am one, and i love this place, but........... As a country we have a habit of thinking we matter more than we do on the world stage, possibly because we tend to punch above our weight in alot of areas (sport 10+ olympic gold medals with a pop of 20 mil is amazing, war we have about 1500 personal in iraq, do a bloody good job, but in reality the yanks have had 200 or 300 thousand i think?, entertainment rusty, bana etc). but one thing we cant punch above our weight with unfortunatly is population and GDP and how they hence affect the automotive industry.

However the USA is the inverse case, as with only a population of .3 billion people, they can out generate the revenue created by 2.5 billion people on ford automobiles at a rate of pretty much 10:1.

makes me realise how lucky we are to have any form of local car industry, let alone 4 car makers. which does go some way to prove that we are a very much smaller economy of scale with the us.

And to think, even with all the BOOM growth in India and china the revenue for ford is still so so, i was a bit disapointed by it really.



can anyone tell i took politics and international relations at uni??

I saw a data table yesterday from 1980's, it had the GDP's of countries and the revenues of the worlds biggest multinationals displayed together. on the list GM was 24th and ford was about 50ish. That means only 24 countries in the world at that time had a GDP bigger than GM's yearly turnover. Amazing. Surely things will have changed to a degree, but its more likely evolution not revolution. You can see why even with them bleeding money how an economy like the USA could not afford to lose them.

anyway, im done. hope others find it as interesting as i did reading it.

and its a change from my usual post whoring.

You quote all those numbers for population, but they include every man womend and child including new borns, I bet only a fraction of the number are adults, and of those adults only a fraction can or will buy new cars.

[Dave_au]

Originally Posted by sleekism

I heard that Holden actually lost money on the Monaros they sold to the USA and that Ford Oz makes more profit per vehicle..............

Monaros Im not so sure about, but given Holdens export program, simple economics would suggest that Holden would make more profit per vehicle simply by the numbers of vehicles produced and economies of scale.

[Paxton]

Originally Posted by sleekism

I heard that Holden actually lost money on the Monaros they sold to the USA and that Ford Oz makes more profit per vehicle..............

Ford do/did make more money on each Falcon than Holden did on the Commodore. Ford learned their lessons after AU, and did all they could to eek a profit out of the Falcon.

Dave_au, Ford have had a long model run with the BA Falcon, and (I assume) they have paid the BA and Territory off, leaving everything they make (after costs) as profit. Holden have just spent $1 Billion on the Commodore, leaving them with a HUGE debt to pay back.