FORD posts $752 million loss in second quarter, but still beats expectations
Wednesday, July 18th 2001, 12:00 am
By: News On 6
DEARBORN, Mich. (AP) _ Ford Motor Co. on Wednesday announced it lost $752 million in the second quarter, including the costs of replacing 13 million Firestone tires, but it still beat Wall Street expectations.
The loss for the world's second biggest automaker amounted to 41 cents a share for the April-June period in contrast to a loss of $577 million, or 47 cents a share, a year ago.
Ford said it lost $1.14 billion on its North American operations in the quarter, compared with a profit of $1.84 billion for the same period a year ago.
The company's U.S. market share for the year is 23.2 percent, down 1.7 percent from a year ago, but has been rising again, reaching 23.8 percent, said chief financial officer Henry Wallace. He said increasing competition from Asian automakers was a major factor in Ford's lowered market share.
Wallace predicted that new products, stabilized prices and declining gas prices would contribute to a stronger performance for Ford during the next six months.
Ford was off 23 cents share at $25.49 in morning trading on the New York Stock Exchange.
Restructuring charges of $201 million for Mazda Motor Corp., of which Ford owns a one-third interest, also hurt Ford's bottom line. Excluding the Mazda restructuring costs and an accounting change, Ford lost $551 million, or 30 cents a share, in the latest quarter.
That beat the consensus forecast of a 34 cents a share loss by analysts surveyed by Thomson Financial/First Call.
Revenues were $42.31 billion, a 5 percent decline from $44.5 billion in the second quarter a year ago.
Ford announced in May that it would replace Firestone tires at a cost of $2.1 billion after taxes because, it said, the tires were prone to failure earlier than other brands.
Ford said about 2 million tires have been replaced, and it expects to complete the program by the first quarter of 2002. All the costs of the replacement program were reflected in the second quarter, Ford said.
Ford said its worldwide vehicle sales during the second quarter of 2001 were down 7 percent compared with the second quarter of 2000.
Ford said it earned $141 million in Europe during the second quarter compared to earnings of $156 million last year.