Thursday, July 23, 2009

Ford Reports a $2.3B Profit; Others Aren't So Sure

Here's a riddle: How do you report a profit, a loss, and a $1B cash burn - all in the same quarter? Well, if you're Ford(F) this isn't much of a riddle, as it appears to be exactly what happened during the automotive giant's fiscal second quarter. As the results came in this morning ~6:45-ish, the CNBC angle (disclaimer: we watch CNBC to pass the time on the treadmill, with the additional purpose of looking to ultimately make fun of the network) was that Ford had lost 21 cents last quarter, but still managed to beat analyst estimates, who were looking for a loss of roughly double what was reported. By the time we cranked the computer up, the WSJ had already blasted out the following story entitled "Ford Posts $2.3 Billion Profit". To the WSJ's credit, the billion dollar cash burn is mentioned just moments into the story, immediately before the reported profit is attributed to "debt-restructuring actions in April".

Accounting maneuvers aside, the real story here is that Ford North America logged a pre-tax loss of $851Million. In fact, Ford's only profitable (automotive) regions for the quarter were South America and Europe, which posted pre-tax profits of $86M and $138M respectively.

The only other bright spot for Ford was, strangely enough, Ford Motor Credit Company - proud owner of a $646M pre-tax profit.

We've actually come to admire Ford for it's determination to stay off the Government's till. Hopefully it can stay that way.

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