Reading the automotive articles from around the world on November 2, 2009, one phrase could be found over and over again, “Ford Motor Company posted a surprise third-quarter profit.” Most of the reports also noted that Ford was the only U.S. automaker to avoid bankruptcy.
The fact is that Ford Motor Company reported a net income of $997 million, or 29 cents per share, in the third quarter. Strong new products, structural cost reductions and improved results at Ford Credit lifted the company’s results despite continued weak global economic conditions. This is a $1.2 billion improvement compared with the same period last year.
Excluding special items, Ford posted pre-tax operating profits totaling $1.1 billion, an improvement of $3.9 billion from a year ago. This marks the company’s first operating profit since the first quarter of 2008. On an after-tax basis, excluding special items, Ford posted an operating profit of $873 million in the third quarter, or 26 cents per share, compared with a loss of $3 billion, or $1.32 per share, a year ago.
“Our third quarter results clearly show that Ford is making tremendous progress despite the prolonged slump in the global economy,” said Ford President and CEO Alan Mulally. “Our solid product lineup is leading the way in all markets. While we still face a challenging road ahead, our One Ford transformation plan is working and our underlying business continues to grow stronger.”
Ford reduced its Automotive structural costs by $1 billion in the quarter, largely driven by lower manufacturing and engineering costs, which included benefits from improved productivity, personnel reduction actions primarily in North America and Europe, and progress on implementing its common global platforms and product development processes. Through the first nine months, Ford has achieved $4.6 billion in automotive structural cost reductions, exceeding its full-year 2009 target of $4 billion.
Ford’s North American operations posted a pre-tax operating profit of $357 million, its first quarterly profit since the first quarter of 2005. Ford South America, Ford Europe and Ford Asia Pacific Africa also posted pre-tax operating profits in the third quarter.
Ford finished the third quarter with $23.8 billion in automotive gross cash, compared with $21 billion at the end of the second quarter of 2009. Automotive operating-related cash flow was $1.3 billion positive during the third quarter of 2009, an improvement of $2.3 billion from the second quarter 2009. Automotive operating-related cash flow was $3.4 billion negative during the first nine months.
“The Ford team delivered another solid quarter of results with strong contributions from all our business regions,” said Lewis Booth, Ford executive vice president and chief financial officer. “Positive cash flow, a stronger balance sheet and a third quarter operating profit are evidence that Ford is meeting the global economic challenges.”
- In the U.S., third quarter market share increased 2.2 percentage points compared to last year as the Ford, Lincoln and Mercury brands all posted sales gains
- Ford Europe’s market share was 9.2 percent for the quarter, up 0.6 points from last year and the highest third-quarter level in 10 years. Market share was 10.1 percent in September, the highest monthly share in eight years
- Record growth in China continued as Ford third quarter sales jumped 63 percent
- At the end of the third quarter, worldwide sales of the new Ford Fiesta reached 470,000 units since its launch last fall. The No. 2 best-selling car in Europe posted its highest September sales since 1994. In September, Fiesta also had its best sales month ever in China. Fiesta arrives in the U.S. market in 2010
- Began selling the new Ford Taurus and Transit Connect in North America. Taurus sales in September were up 60 percent from a year ago
- The Ford Focus and Ford Escape were among the top new vehicles purchased in the U.S. government’s “Cash for Clunkers” program
- Ford’s U.S. hybrid sales have risen 73 percent this year compared to a 14 percent decline in U.S. hybrid industry sales. More than 60 percent of Ford Fusion hybrid sales have come from non-Ford owners
- Ford began production of the Ford Transit Connect small commercial van at the new manufacturing plant in Craiova, Romania
- Announced investment of $500 million at Ford India’s Chennai assembly plant to build the new Ford Figo, a small car targeted at the heart of the Indian market, debuting in 2010
- Announced a new $490 million assembly plant in Chongqing, China, which will be completed by 2012, and will produce the Ford Focus for the Chinese market
- Ford, Lincoln and Mercury brand vehicles in the U.S. had the fewest number of “things gone wrong” among all automakers, according to the third quarter GQRS study of new vehicle quality
- Received $886 million in loans from the U.S. Department of Energy for development of more fuel-efficient vehicles. Ford has been approved for up to $5.9 billion in loans in support of projected expenditures through mid-2012
- Raised $565 million in new equity as Ford completed its previously-announced plan to issue up to $1 billion of equity
- Ford Credit completed $10 billion in funding in the third quarter, including $2.8 billion unsecured, and now has essentially completed its full-year funding plan
- The Ford Taurus and Lincoln MKT both earned a “Top Safety Pick” from the Insurance Institute for Highway Safety. Ford Motor Company continues to have more IIHS “Top Safety Pick” ratings than any other automaker
- Unveiled the all-new Ford C-MAX at the Frankfurt Motor Show. The C-MAX and the Grand C-MAX will debut in Europe in 2010, and the Grand C-MAX debuts in the U.S. in 2011. The new global C-car platform will underpin up to 10 models and more than 2 million units annually by 2012
- Announced that Ford’s 1.6-liter and 2.0-liter four-cylinder EcoBoost engines will make their debut in 2010 across Europe, North America, and Australia
- Unveiled the new Ford Figo to compete in India’s small car segment beginning in 2010
- Launched the new Ford Fiesta in Taiwan and continued the successful rollout of the Ford Focus and Ford Everest SUV in additional Asian markets
- Revealed the new 2011 Ford F-Series Super Duty and two new powertrains developed by Ford – a 6.7-liter V8 diesel engine and a 6.2-liter V8 gasoline engine
- Began selling the 2010 Ford F-150 SVT Raptor, an off-road performance truck, which captured the “2009 Pickup Truck of Texas” award from the Texas Auto Writers. The Ford F-150 won the overall “Truck of Texas” award, the seventh straight year a Ford truck has earned the honor