Ford may say Q4 loss narrowed

Ford Motor Co, the automaker that lost a record $12.6 billion in 2006, may report a narrower fourth-quarter loss after Chief Executive Officer Alan Mulally closed plants and cut jobs in his first full year on the job.

Mulally, a former Boeing Co executive who took over the world's third-biggest automaker in September 2006, also won a contract with the United Auto Workers that shifts retiree healthcare obligations to a union-run fund and cuts pay for new hires. Ford's goal is to post an annual profit next year.

"They're doing the right things," said Mirko Mikelic, who helps manage $21 billion in fixed-income assets including Ford debt at Fifth Third Asset Management in Grand Rapids, Michigan. "They still have a ways to go."

Ford lost 24 cents a share last quarter, based on the average estimate of 15 analysts compiled by Bloomberg, excluding what the company considers one-time items. Dearborn, Michigan-based Ford had a loss of $1.10 a share on that basis a year earlier.

Through three quarters of 2007, Ford had net income of $88 million, or 5 cents a share, compared with a year-earlier net loss of $6.99 billion, or $3.73.

The company trimmed automotive costs by $4.6 billion while boosting sales by almost $8 billion in the nine months, according to a US regulatory filing.

Ford reports fourth-quarter results today before the start of trading on the New York Stock Exchange.

US sales of Ford's large pickups and sport-utility vehicles fell last quarter as gasoline prices stayed near $3 a gallon, while vehicle demand industrywide declined amid a weakening housing market and waning consumer confidence.

Toyota at No 2

The company's decline helped Toyota Motor Corp move up to No 2 in annual US sales, a ranking Ford had held since 1931. General Motors Corp is the biggest US automaker.

Ford "is struggling against some serious handicaps, both internal and external", David Healy, an analyst at New York-based Burnham Securities, wrote in a note yesterday.

Still, the company "has succeeded in bringing itself to approximate breakeven", he said. Healy doesn't rate its shares.

Automakers including Ford have forecast that industrywide US sales will fall at least during this year's first half. Ford tumbled to a 22-year closing low of $5.76 on Jan 17 in New York Stock Exchange composite trading.

It closed at $5.93 on Tuesday. The shares traded in Germany advanced to the equivalent of $5.95 as of 9:46 am yesterday in Frankfurt.

The company's 7.45 percent bond due July 2031 was unchanged on Tuesday at 70.5 cents on the dollar, according to Trace, the bond-price reporting system of the NASD. The yield was 10.98 percent.

Agencies

(China Daily 01/24/2008 page17)