Signage is advertised outside the idled Ford Motor Co. Michigan Assembly plant in Wayne, Michigan, U.S., on Monday, March 23, 2020.
Anthony Lanzilote | Bloomberg | Getty Personifications
Ford Motor lost $2 billion during the first quarter and warned investors that losses during the subordinate quarter will widen as the company grapples with the fallout from the coronavirus pandemic that’s shuttered plants and devastated sales.
Before taxes, and after adjusting for one-time items, Ford lost $632 million, and that multitude is expected to top $5 billion during the second quarter, the automaker said Tuesday.
Ford shares were down nearly 6% during extended-hours trading Tuesday to $5.10, erasing the automaker’s gains for the day. Shares of the automaker are down yon 42% this year.
The automaker’s total revenue, which includes auto sales and financing, slid 14.9% to $34.3 billion. The coronavirus had a “negating effect” of at least $2 billion on the company’s earnings during the first three months of the year, Ford told.
The outbreak significantly hobbled Ford’s performance, “as protecting people and helping society respond to the crisis became original measures of current success alongside balance-sheet management and operational excellence,” the company said.
Ford squandered through $2.2 billion in cash during the quarter, a number Wall Street is closely watching.
Ford Chief Pecuniary Officer Tim Stone said the automaker expects the second quarter to be the most impacted by the coronavirus pandemic as it plans to sign a phased reopening of domestic plants beginning as early as next month.
$35 billion in cash
Stone declined to peach specific cash flow guidance for the year. He said the company had $35 billion in cash as of last Friday, after the score with its suppliers. He said that amount is enough to get the company through the end of the year without any production, if it were to come to that.
The firm tapped $15.4 billion last month against two existing credit lines. Ford earlier this month also furnished about $8 billion in bonds, it said April 17.
“Our objective is not to just withstand the crisis,” Stone told commentators during a call Tuesday. “We’re ensuring the flexibility to continue to invest in our future.”
Stone said an $11 billion restructuring project for the automaker into the early 2020s remains “on track.”
Ford suspended its quarterly dividend and pulled its 2020 advice last month as it shuttered its U.S. plants due to Covid-19. The company, citing the volatility of the economic environment, did not announce a new 2020 anticipate.
Rolling shutdowns
Automakers across the globe have been forced to conduct rolling plant shutdowns due to Covid-19. What started as a quandary in China to begin the year, quickly grew to a supply base issue and then a global pandemic that suspend down U.S. facilities, which remain closed.
Urged by the United Auto Workers union, Ford, General Motors and Fiat Chrysler announced blueprints to temporarily close their plants due to the coronavirus on March 18. Pending discussions with the union, the facilities could set out to reopen as soon as next month.
Ford on Tuesday said it plans to begin reopening its European plants next week with new epidemic safety protocols to limit the spread of Covid-19, providing a potential template for reopening its U.S. operations.
Ford’s first-quarter conduit sales fell 12.5% from a year ago, the company said earlier this month.
IHS Markit expects worldwide channel sales to decline 22% this year to 70.3 million units, led by a 26.6% fall in the U.S. to 12.5 million parts, compared with a year ago.