Ford Motors posted a 14.93% reduction in revenue for the quarter, ending March with US$34.3 billion [AU$34.3 billion], as opposed to last year’s $40.34 billion.
Pandemic-driven losses, more to be anticipated in Q2
While sales were in the black in North America, Ford said that its total sales took a hit due to poor performance in the international markets, resulting in negative sales totaling to about $523 million.
This contributed to the $2 billion loss of revenue in the first quarter. The automaker said that most of this was due to higher reserves in anticipation of credit losses, the lower price point of off-lease vehicles, and in preparation of lease defaults, according to Barrons.
The kicker, though, was the company’s anticipated losses in the second quarter. Ford Motors is predicting more than $5 billion in losses by the end of June this year.
This would mean a projected revenue of less than $30 billion compared to last year’s $35.76 billion. This would also translate to a higher loss per share compared to the first quarter’s $0.23 per share loss.
Stocks steady, improve slightly
The company’s stock price has remained steady, however, and is on track to end the month higher than it started it. Ford started April with a $4.40 adjusted, and ended today at $5.26.
Analysts attribute this steady stock to strong investor confidence in Ford’s business management. The company is focusing on ensuring liquidity by borrowing $15 million in credit, and selling another $8 million in bonds.
As it currently stands, Ford Motors has $35.1 billion on hand. Ford Credit, its financing subsidiary, has $28 billion.
The company also plans on slowly reviving its production facilities in the U.S. and Europe, reports The Motley Fool. This comes as governments start easing back on lockdowns throughout the globe. It plans on doing this by the middle of May.
Ford extends pandemic assistance
It has also initiated programs that can help both paying customers and their dealers in coping with the economic effects of the pandemic.
Ford CEO Jim Hackett said:
“Ford people are keeping each other safe, limiting the spread of the virus, safeguarding healthcare workers and first responders, and taking care of customers. The imagination, initiative and execution of our team is helping save lives today, and those qualities will allow Ford to emerge from this as a stronger company.”
Ford Motors has also diverted its attention to helping health professionals with transport and protective equipment. It has also assisted patients with hospital equipment necessary to assist in coronavirus care and recovery.