Due to the production halts and the decline in car sales in the US, Ford Motor is forecasting that it could be reporting losses of around $600 million for its first quarter this year. The company stated on Monday that adjusted pretax losses could reach that figure given the data it has gathered so far.
Ford told investors this week that it can't yet provide an accurate estimate of its total earnings for the quarter as it is still gathering all of the relevant data. However, the company stated that its forecasted loss does not include around $300 million in costs for special items.
For its first quarter, Ford expects to reach total revenues of around 34 billion, a 15.7 percent drop from the $40.3 billion it reported in its first quarter last year. Total net income and earnings after adjustments for the first quarter this year are expected to also drop by around the same percentage. For its first quarter last year, Ford gained a net income of $1.15 billion and earnings of around $2.4 billion after adjustments.
The company's shares prices dipped by more than 5 percent on Monday morning trading following its grim forecast. The company's shares, which had received a "junk" rating from S&P Global, is down by more than 40 percent since the start of the year.
Ford reassured investors that it still has enough liquidity to weather the crisis, at least until the end of the third quarter. Ford CFO, Tim Stone, mentioned in a press release that the company will still be able to survive even with no production and no additional financing actions for the next few months.
Last week, the US automaker stated that it had around $30 billion in cash on its balance sheet. It had managed to bolster its finances by acquiring around $15.4 billion from its two existing credit lines last month.
Like other automakers, Ford has been forced to shut down its manufacturing facilities around the world due to the continued spread of the coronavirus. The shutdowns have also forced the company to cut its workforce in heavily hit markets. Apart from government orders, unions that had expressed concerns over the spread of the virus amongst workers also played a part in forcing automakers to temporarily suspend production.
So far, Fiat Chrysler has been the only automaker to announce plans to restart production. The company had stated that it plans to resume operations on May 4. Meanwhile, both Ford and GM have yet to set a schedule of when they would be reopening their facilities.
