Ford Raises Outlook For Second Quarter, Drops it for Full Year
Ford Motor Co. has cut down its earnings per share guidance for the year, as the company’s profit outlook for North American operations weakens.
Special items and discontinued operations excluded, Ford cut its earnings guidance from between $1.25 and $1.50 per share to between $1.00 and $1.25 per share.
The company did raise expectations for second quarter performance, however. Earnings guidance was raised from between breakeven and $0.15 per share to between $0.30 and $0.35 per share for the quarter.
The company raised its second-quarter guidance mainly because of better-than-expected rsesults from its Ford Motor Credit business, and because of a reduced tax-rate assumption. According to Bloomberg News,
Ford said it will trim 5 percent of salaried jobs in North America, in addition to a cut of 1,000 such positions in the U.S. announced in April. Chief Financial Officer Don Leclair said in an interview that the latest reduction applies to about 35,000 employees at the Ford, Lincoln and Mercury brands.
Ford also said it’s also eliminating 2005 bonuses for managers worldwide and is suspending matching grants for salaried- worker 401(k) retirement plans effective July 1. North American use of agency and purchased services will be cut 10 percent.
“Although we have increased our earnings guidance for the second quarter, challenges continue to mount, especially in our North America automotive operations,” said Don Leclair, executive vice president and CFO of Ford. “We’re taking steps immediately to reduce further our salaried- related costs this year; these are a continuation of a series of actions we plan to take to address our operating challenges.”
“We remain committed to improving our cost structure, optimizing our global footprint, and making essential investments for the future,” Mr. Leclair stated.