Ford Posts Terrible First Quarter Numbers, Says Things Will Get Much Worse

Ford Workers Jim YoungAFPGetty Images
Jim Young/AFP/Getty Images

Ford Motor Company said Tuesday that it lost $2 billion in the first quarter and expects to lose far more in the second quarter, blaming nearly all of the losses on the negative effects of the coronavirus.

The automaker said Tuesday that its revenue from January through March fell nearly 16 percent to $31.3 billion as most of its factories were shut down for the final week of the quarter.

The company lost 50 cents per share. That was worse than Wall Street estimates of an 8-cent-per-share loss, according to FactSet.

The automaker’s total revenue, which includes auto sales and financing, slid 14.9 percent to $34.3 billion.

Ford said it expects an adjusted pretax loss of $5 billion during the second quarter.

Earlier this month the Dearborn, Michigan, company floated $8 billion in bonds at interest rates ranging from 8.5 percent per year to 9.625 percent in an effort to prepare for the downturn. They mature from 2023 to 2030.

The company says that it is well prepared to survive even a prolonged coronavirus crunch. At the end of the first quarter, Ford Credit, the company’s financing unit, had $28.0 billion in liquidity. Ford itself had a cash balance of $35.1 billion and had burned through $2.2 billion in the first quarter. The company says it expects the drain on cash to slow significantly as supplier payouts, which have a 45-day lag, are run down.

“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,” said Tim Stone, Ford’s CFO. “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.”

That might be good news for the shareholders of Ford but it is bad news for the suppliers, many of whom are far more fragile than the automaker itself. Ford’s efforts to lower its costs will cut their incomes and likely lead to layoffs.

North American factories at Ford and other automakers have been shut down since late March, cutting off the companies’ main source of revenue. Some companies have announced plans to restart factories but Ford, General Motors and Fiat Chrysler still are negotiating a date with the United Auto Workers union.

–The Associated Press contributed to this report.


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