Ford Profit Down From Last Year
Ford Motor Company reported net income of 60 cents per share, or $1.21 billion, for the first quarter of 2005.
This compares with net income of 94 cents per share, or $1.95 billion, in the first quarter of 2004.
Ford’s first-quarter earnings from continuing operations, excluding special items, were 62 cents per share, or $1.26 billion.
Ford’s total sales and revenue in the first quarter rose to $45.1 billion from $44.7 billion in the year-ago period.
“The plan that we launched in 2002 has led to profits and positive cash flow,” said Bill Ford, chairman and chief executive officer. “Going forward, we will continue to focus on improving our quality, lowering our costs, and delivering exciting new products, as well as taking actions that strengthen our finances, optimize our global footprint and lead to the faster development of new products.”
The following discussion of the results of our automotive sector and business units is on a basis that excludes special items. See attachment for the nature and amount of these special items and a reconciliation to pre-tax results on a GAAP basis.
On a pre-tax basis, excluding special items of $106 million, worldwide automotive profits in the first quarter were $579 million, down by $1.25 billion from the same period a year ago.
Worldwide automotive sales for the first quarter rose to $39.3 billion from $38.8 billion in the same period last year. Worldwide vehicle-unit sales in the quarter were 1,716,000, down from 1,788,000 a year ago.
Operating-related cash flow was $800 million positive for the quarter. Automotive cash, marketable securities, loaned securities and short-term Voluntary Employee Beneficiary Association (VEBA) assets on March 31, 2005 were $22.9 billion, down from $23.6 billion at the end of the fourth-quarter.
For the first quarter, the Americas reported a pre-tax profit of $740 million, excluding special items, down $1.24 billion from a $1.98 billion pre-tax profit in the same period a year ago.
North America: In the first quarter, Ford’s North American automotive operations reported pre-tax profit of $663 million, excluding special items, down $1.3 billion from a year ago. Lower volumes, higher costs, unfavorable currency exchange, and unfavorable net pricing contributed to the decline. Sales were $21.1 billion, down from $23.2 billion in the same period a year ago.
South America: Ford’s South American automotive operations reported a first-quarter pre-tax profit of $77 million, an increase of $62 million from first quarter 2004. The improvement reflected primarily higher volumes, favorable currency exchange, and higher pricing partially offset by higher commodity costs. Revenue for the first quarter increased to $866 million from $650 million in 2004.
FORD EUROPE AND PREMIER AUTOMOTIVE GROUP (PAG)
The 2005 first-quarter combined pre-tax profit for Ford Europe and PAG automotive operations was $4 million, compared with a profit of $38 million for the year-ago period, excluding special items, a year-over-year deterioration of $34 million.
Ford Europe: Ford Europe’s first-quarter pre-tax profit was $59 million, compared with a pre-tax profit of $5 million, excluding special items, during the 2004 period. The improvement of $54 million primarily reflected higher volume and ongoing cost reductions. Ford Europe’s sales in the first quarter increased to $7.7 billion, compared with $6.5 billion during the first quarter of 2004.
Premier Automotive Group: PAG reported a pre-tax loss of $55 million for the first quarter, compared with a pre-tax profit of $33 million for the first quarter of 2004. The decline in results primarily reflected unfavorable currency exchange, offset partially by lower costs. First-quarter sales for PAG were $7.6 billion, compared with $6.8 billion a year ago.
FORD ASIA-PACIFIC and AFRICA/MAZDA
The 2005 first-quarter combined pre-tax profit for Ford Asia-Pacific and Africa/Mazda was $97 million, compared with $82 million for the year-ago period, a year-over-year improvement of $15 million.
Ford Asia-Pacific and Africa: For the first quarter of 2005, Ford Asia- Pacific and Africa reported a pre-tax profit of $43 million, an improvement of $15 million from the same period a year ago. The improvement primarily reflected higher volumes and a gain on the sale of Ford’s interest in Mahindra and Mahindra in India. Sales rose to $2 billion, compared with $1.6 billion during the first quarter of 2004.
Mazda: During the first quarter of 2005, Ford’s share of the pre-tax profit of Mazda and associated operations was $54 million, unchanged from the same period a year ago.
FORD MOTOR CREDIT COMPANY
Ford Motor Credit reported net income of $710 million in the first quarter of 2005, up $22 million from earnings of $688 million a year earlier. On a pre-tax basis, Ford Motor Credit earned $1.1 billion in the first quarter, unchanged from the previous year. The results primarily reflected improved credit loss performance, offset partially by the impact of a decline in volume and higher borrowing costs.
Hertz reported a first-quarter pre-tax profit of $33 million, a $40 million improvement from the $7 million pre-tax loss from the same period in 2004. The improvement reflected higher car and equipment rental volumes and higher proceeds from the disposal of used vehicles, partially offset by a highly competitive pricing environment in car rental markets.
“As we previously announced, we have reduced our full-year earnings guidance for 2005 to a range of $1.25 to $1.50 per share, excluding special items. This outlook is based on our expectation of a tougher operating environment for the remainder of the year,” said Executive Vice President and Chief Financial Officer Don Leclair. “Consistent with this, we expect our second-quarter earnings per share, excluding special items, to range from a loss of 15 cents per share to breakeven.”
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