Ford Motor Co. said Thursday that it lost $123 million in the second quarter due to slumping sales and the cost of shedding personnel. The nation’s second-biggest automaker said it would cut production more than previously planned this quarter and pledged to accelerate its restructuring effort.
It plans to announce new restructuring measures within the next two months.
Chairman and Chief Executive Bill Ford said in a conference call that by the end of the year the company would be about a third of the way toward its goal of closing 14 plants and cutting 25,000 to 30,000 jobs by 2012. Production capacity will be down 15 percent by year’s end, he said.
The loss of 7 cents per share for the April-June period contrasts with a profit of $946 million, or 47 cents per share, in the second quarter of last year. Revenue fell 6 percent to $41.97 billion from $44.55 billion.
Excluding special items, Ford’s second-quarter loss from continuing operations was 3 cents a share. Wall Street had been expecting a profit of 12 cents per share, according to a survey by Thomson Financial.
The company said it had a pretax loss of $797 million in North America, an improvement over last year’s $907 million loss in the second quarter. It said the cost reductions were offset by the market’s shift away from trucks to lower-margin cars, higher sales incentives and adverse foreign currency exchange rates.
Ford shares fell in trading on the New York Stock Exchange Thursday. Bill Ford said the company will discuss “additional actions” in its restructuring plan within the next 60 days, but declined to give details.
“The key question is how Ford’s solution has changed in response to a more difficult environment,” Morgan Stanley analyst Jonathan Steinmetz said in a research note Thursday. “This is not yet clear.”
The automaker said its third-quarter production cuts would be deeper than previously announced. Production is expected to drop 8 percent from the third quarter of 2005 to 670,000 — 40,000 fewer vehicles than previously announced.
The company took a charge of $171 million, or 6 cents per share, to shed employees at plants it is idling. It also took a related charge of $315 million, or 11 cents per share, due to pension curtailments due to employee buyouts in the second quarter.
But the charges were partially offset by a gain of $148 million, or 8 cents per share, due to a gain that Mazda Motor Corp. took on the transfer of its pension liabilities to the Japanese government. Ford owns about a third of Mazda. Also offsetting the charges was a favorable adjustment of $146 million, or 5 cents per share, to a $1.7 billion charge for layoffs and termination packages in the first quarter, the company said.
For the first half of the year, Ford lost $1.3 billion, or 70 cents a share, in contrast to a profit of $2.16 billion, or $1.05 a share, a year ago. Six-month revenue fell to $83 billion from $89.7 billion a year ago.