Ford beats Wall Street earnings expectations after coronavirus shuttered factories

Earnings

Jim Hackett of Ford Motor speaks at an event during the 2018 North American International Auto Show (NAIAS) in Detroit, Michigan, U.S., on Jan. 14, 2018.

Andrew Harrer | Bloomberg | Getty Images

Ford Motor is expected to report billions of dollars in losses due to the coronavirus when it releases its second-quarter earnings after the bell Thursday.

Ford CFO Tim Stone warned investors in April that the company expected to lose more than $5 billion, on an adjusted pretax basis, during the second quarter as the pandemic shuttered factories and severely hampered auto sales.

Analysts and investors are watching to see if Ford was able to pare back those expected losses since consumer demand in the U.S. was stronger than anticipated, especially for rugged trucks and SUVs. The company also resumed normal shift operations at domestic plants a month ahead of schedule.

Here’s what Wall Street is expecting, based on average analysts’ estimates compiled by Refinitive.

  • Adjusted loss per share: $1.17 per share.
  • Automotive revenue: $15.95 billion.

Wall Street also is watching how much cash Ford burned in the quarter as well as any guidance on paying off debt or updates to an $11 billion restructuring plan led by Ford CEO and President Jim Hackett.

“They’ve got a ton of cash. They’re certainly not going to run out of money this year,” Morningstar analyst David Whiston told CNBC. “Ford’s problem, as they’ve said in their own words, they’re not physically fit.”

General Motors, which reported its second-quarter earnings Wednesday, said it lost $536 million on an adjusted basis, which was better than Wall Street expected.  On an unadjusted basis, the company lost $806 million and it burned through $7.8 billion in cash during the quarter.

During the first quarter, Ford lost $2 billion and burned through $2.2 billion in cash.

Both Ford and GM roughly doubled their automotive debt to $30 billion during the first quarter to help bolster their balance sheets and get through the Covid crisis.

GM said Wednesday it expects to repay a $16 billion revolving credit line it drew down in March by the end of the year.

This is breaking news. Please check back for updates. 

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