Ford today reported an operating loss of $1.8 billion for the first quarter of 2009 — considerably better than the $3 billion most analysts were expecting. The company also slowed its cash burn to $3.7 billion, which represents a significant improvement over the $7.2 billion lost in the fourth quarter of 2008. Shares of Ford rose as high as 20 percent immediately after the opening bell.
Including one-time savings, the company’s loss was $1.4 billion for the quarter. Total cash in the bank is $21.3 billion, and the anticipated sale of Volvo could provide a large one-time cash gain at some point during the year. Ford says it does not expect to need any loans from the U.S. government on its path toward profitability. The automaker further stated it expects to achieve break-even or better results in 2011.
Worldwide Automotive revenue in the first quarter was $21.4 billion, down from $35 billion a year ago. The decline is attributed to significantly lower volume. Total vehicle wholesales in the first quarter were 973,000, compared with 1,531,000 units a year ago. The fact that Ford has been able to keep its costs under control, despite rapidly declining revenue, is a good sign for its continued survival.
“The successful debt restructuring, coupled with previously announced agreements with the United Auto Workers, will strengthen Ford’s balance sheet and will result in significant savings going forward,” said Lewis Booth, Ford executive vice president and chief financial officer. “On the product side, our global lineup has never been stronger. We remain hopeful that the government stimulus actions around the world will help improve auto demand, particularly in the second half of this year.”
