Ford seen posting third straight quarterly loss
By Poornima Gupta
DETROIT (Reuters) - Ford Motor Co. on Monday is expected to post its third straight quarterly loss as it details charges for shedding jobs and the toll the restructuring is taking on its cash position, analysts said.
Ford, which has lost $1.44 billion so far this year, last month unveiled a stepped-up cost-cutting plan that will reduce salaried jobs by 14,000 and hourly jobs by up to 30,000 through buyouts and plant closings.
Ford's results will be the first since Alan Mulally, a former Boeing Co. executive, took over as chief executive from Bill Ford Jr. last month.
Investors and analysts are waiting to see what actions Mulally, who led a turnaround at Boeing's commercial airplane unit, will take to return the No. 2 U.S. automaker to profitability.
Analysts expect Ford's third-quarter loss to range from 35 cents to 91 cents per share, excluding items. The average estimate, based on 15 analysts, was for a loss of 62 cents per share, according to Reuters Estimates.
In the same period last year, Ford had a loss of 10 cents a share.
Burnham Securities analyst David Healy said big charges for shedding jobs and increasing operating losses could lead to an enormous cash burn during both 2006 and 2007, exceeding the company's internal resources as well as its borrowing power from conventional sources.
"Competitive conditions are likely to be harsher in the first half of 2007 than they were a year earlier, and we are currently looking for Ford to lose about $2 a share next year," Healy said, adding that he expects cash burn of about $11 billion in 2006 and 2007.
High gasoline prices have caused consumers to shift away from sport utility vehicles and large trucks to smaller and less profitable cars -- an area of relative weakness for Ford.
Overall, Ford's North American light vehicle production was down 12 percent in the quarter, while large SUV and pickup truck production fell 36 percent and 30 percent, respectively, indicating a squeeze on profit margins.
Ford said in August it would trim fourth-quarter production by 21 percent. Keywords: AUTOS
