Ford today reported a net loss of 7 cents per share, or $123 million, for the second quarter of 2006. This compares with net profit of 47 cents per share, or $946 million, in the second quarter of 2005. Ford’s second-quarter loss from continuing operations, excluding special items, was 3 cents per share, or $48 million, compared with a profit of 47 cents per share, or $936 million, in the same period a year ago. Ford’s second-quarter total sales and revenue was $42 billion, down $2.5 billion from a year ago. In the second quarter, Ford’s North America automotive operations reported a pre-tax loss of $797 million, compared with a pre-tax loss of $907 million a year ago. The improvement is more than explained by cost reductions in most areas of the business, partially offset by a mix shift from trucks to passenger cars, higher incentives and adverse foreign currency exchange. Sales were $19.2 billion, down from $19.9 billion for the same period a year ago.
Executive Vice President and Chief Financial Officer Don Leclair said, “Although we’ve made progress on a number of fronts, clearly we have more to do. This includes maintaining our focus on improving our quality, reducing our costs and maintaining our strong liquidity as we respond to the tougher operating environment we face.”
“We’ve seen an improvement in North America results in the second quarter, but the external factors we face aren’t going to get any easier,” said Chairman and Chief Executive Officer Bill Ford. “Mark Fields (executive vice president and president – The Americas) and his team have been working on plans to accelerate their efforts. Within the next 60 days, we’ll be in a position to discuss the additional actions we will be taking.”
PAG reported a pre-tax loss of $162 million for the second quarter, compared with a pre-tax profit of $17 million for the same period in 2005. The decline is more than explained by the impact of the expiration of favorable hedges that were put in place in previous years, adjustments to warranty accruals for prior models, and lower market share at Volvo in advance of new model introductions. These factors were partially offset by favorable product and market mix, driven largely by the success of new products at Land Rover, Jaguar and Aston Martin. Second-quarter sales for PAG were $7.8 billion, compared with $7.9 billion a year ago.
North America third-quarter production is projected at 670,000 units, down 58,000 units on a year-over-year basis, and 40,000 units less than what was previously announced. This change from the prior level is more than explained by lower truck production, reflecting our intention to maintain appropriate dealer inventory levels. Ford Europe production is projected at 410,000 units, up 38,000 units from last year, primarily reflecting the timing of vacation shutdowns. PAG production is projected at 150,000 units, down 3,000 units from last year.
