Ford Motor Co. today reported a second-quarter loss of $8.7 billion, or $3.88 a share — the company’s worst quarterly results ever.

The performance is a consequence of slumping sales, especially of trucks, in a sour U.S. economy with $4-a-gallon gasoline, as well as rising material costs.

Last year during the same period, Ford reported a net profit of $750 million, or 31 cents a share.

Revenues during the April-June period declined to $38.6 billion, down from $44.2 billion a year ago.

The second-quarter loss includes $8 billion, or $3.26 a share, in special charges, mostly in North America, which has been hit hard by an economic slowdown, a consequence of crises in the housing, credit and energy sectors.

Ford’s operating loss from continuing operations, excluding special items, was $1.4 billion, down from a year-ago profit of $258 million.

During the quarter, Ford’s cash reserves also decreased by $2.1 billion, to $26.6 billion.

Following Ford’s $100-million profit in the first quarter, Ford has now lost $8.5 billion through the first half of the year.

At the same time, the company outlined an updated revival strategy that includes:

• Adding new fuel-efficient small cars and crossovers to North American product lineup. That includes six European small vehicles that are coming to North America from global B-car and C-car platforms.

• Converting three large truck and SUV plants to small car factories. Retooling begins this December.

• Upgrading the Ford, Lincoln and Mercury lineup almost completely by end of 2010.

• Doubling hybrid vehicle production and lineup in 2009.

• Doubling capacity for North American four-cylinder engines by 2011.

• Ford also plans to be the best or among the best in fuel economy with every new product in its segment

Prior to this quarterly performance, the worst three-month periods on record at Ford were in 1992 and 2006.

In the last three months of 2006, Ford posted a $5.8-billion loss, or $3.05 a share, which was the second-worst quarterly result in its history. Ford also lost $6.7 billion in the first quarter of 1992, mainly because of accounting rule changes on health care liabilities.

In a statement issued this morning, Ford CEO Alan Mulally said Ford is well positioned for the future.

“We continue to take decisive action in response to the rapidly changing business environment,” he said. “Our European and South American operations are robust and profitable. We have momentum in Asia. And we are uniquely positioned to leverage our global assets and the global strength of the Ford brand to quickly bring more small, fuel-efficient vehicles to North America.”

By 11:30 a.m. today, Ford stock was down 60 cents a share or 9.95% to $5.43 a share.

 

via  freep

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