Rays of recovery - Ford Motor posts USD 1 billion quarterly profit
Saturday, 07 Nov 2009
Reuters reported that Ford Motor Co posted a USD 1 billion quarterly profit, defying Wall Street forecasts of a loss, as it cut costs and gained market share, leading it to raise its 2011 outlook to solidly profitable from break even.
Ford's shares surged 8% as the surprising profit and increased outlook overshadowed news that the United Auto Workers union rejected a tentative cost cutting deal with the automaker that would have brought its labor costs in line with US rivals.
The only large US automaker not to file for bankruptcy in 2009, Ford also said that it is seeking to extend its revolving credit facility from 2011 to 2013 and raise another USD 3 billion of capital through convertible debt and equity offerings.
The quarterly results provided more evidence that Ford has distanced itself from US rivals General Motors Co and Chrysler, which have struggled to complete restructurings after emerging from government-funded bankruptcies earlier in 2009.
Ford reported USD 1.3 billion of positive cash flow in the third quarter, its first positive quarter since the second quarter of 2007 and forecast positive cash flow in the fourth quarter. It burned through USD 4.7 billion of cash in the first half of 2009.
Ford posted losses totaling USD 30 billion from 2006 through 2008 and remains saddled with a much heavier debt load than GM or Chrysler following their bankruptcy reorganizations.
