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Ford Profits Dip During Q2

Like Chrysler, Ford hit by one-time charges.

by on Jul.26, 2011

One-time charges, including the cost of abandoning the Mercury brand, hit Ford's bottom line.

Ford Motor Co. reported a slight drop in earnings for the second quarter as special, one-time charges – including the abandonment of the Mercury brand — hit the company’s earnings sheet.

Nevertheless, Ford still posted net income of $2.4 billion, or 59 cents per share, an 8% year-over-year decline of $201 million, or 2 cents per share, from second quarter 2010.  But the maker also posted a healthy 13% increase in revenues.

Without the one-time write-offs, Ford would have earned $2.9 billion, or 65 cents a share – slightly ahead of the consensus analyst forecast of 60 cents.

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It was notably the ninth consecutive quarterly profit by Ford, the only domestic automaker to avoid filing for bankruptcy protection during the auto industry’s deep downturn in 2009.  Chrysler, which also reported its second-quarter numbers today, said it went $370 million into the red as the result of one-time charges connected to the payoff of its government bailout loans.  (Click Here for more on Chrysler.)

“We delivered very good second quarter results while growing the business globally and serving more customers in every region,” said Alan Mulally, Ford president and CEO. “Despite an uncertain business environment, we further strengthened our balance sheet and continued to invest for the future.”


Ford Salaried Workers In Line For Bonuses

Maker promises to share the spoils.

by on Mar.30, 2010

Ford is taking steps to reduce debt -- and reward its loyal workforce.

After a three-year wait, more than 20,000 salaried Ford workers are in line to collect bonus pay again – along with a return of merit pay increases.

Though Ford officials caution the maker must hit a number of targets before the money lands in the hands of its employees, even the prospect of bonuses comes as good news for a company that has faced some serious economic challenges in recent years.  But it also underscores the apparent success Ford is having, even as its crosstown rivals struggle after last year’s bankruptcies.

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The exact size of the payout is unclear, and will likely vary from worker to worker.  In 2007, bonuses ran as high as $15,000.


Ford Ratings Get a Boost

Partially closes a competitive disadvantage.

by on Mar.19, 2010

Ford is still saddled with more debt than its domestic rivals, but a better debt rating helps offset this competitive disadvantage.

Ford Motor Co. comeback drive got another boost this week when Moody Investor Services bumped up the rating on Ford’s outstanding debts. The rating change should reduce Ford’s borrowing costs – a critical matter since while the automaker was able to avoid bankruptcy, last year, it now carries significantly more debt than Chrysler and General Motors, which both used Chapter 11 to wipe out most of their own liabilities.

Ford had no official comment on the upgrade but senior executives, such as chief financial officer Lewis Booth, have been quietly lobbying for the move, which offsets one of the last remaining competitive disadvantages facing Ford.

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Moody’s raised Ford Motor’s senior unsecured debt rating by one notch to B3, which is still six notches into junk status. It also raised the corporate family rating and probability of default rating by a notch to B2, which actually means Ford is less likely to default on its securities, and secured credit facility by a notch to Ba2, placing it two notches into junk.

“Ford clearly has a much more robust and competitive business model that is capable of supporting significant improvement in performance over time,” said Moody’s senior vice president Bruce Clark.