Ford Posts $997 Million Profit, Still Down $1.3 Billion This Year

Ford's reporting a net income of $997 million, or 29 cents per share this quarter, an improvement of $1.2 billion from third quarter, 2008. So what? They're still in the operating red by $1.3 billion this year. Analysis below.

Keep in mind that despite a $997 million profit this quarter, it's an aberration more than a real sign that Ford's fully turned around. First, this big showing comes in large part from Cash for Clunkers — both here in the U.S. and in Europe. Secondly, Ford's still showing a net $573 million loss through the first three months of the year — including special items. NOT including special items, they've lost over $1.3 billion. So, good work by Ford this quarter, but in no way does this signify Ford's out of the water.

And don't even get me started on that SAAR number they're predicting for the rest of 2009 and 2010.

Press release and commentary in the gallery of slideshow pages below.

Look, Ford's saving money by even using only black and white in their slideshows. Good work Ford!

Note those nine month losses on the right...

This is sort of a big deal — Ford's now predicting an industry volume — SAAR — of 12.5 million vehicles they're predicting will be sold here in the U.S. Really? That high? Really? Is someone in a Cash For Clunkers-induced fever dream.

Here's the big number — $1.3 billion in full pre-tax operating losses for the year. Here's the full press release:

FORD POSTS THIRD QUARTER 2009 NET INCOME OF $1 BILLION; CASH FLOW TURNS POSITIVE; NORTH AMERICA PROFITABLE+

* Reported net income of $997 million, or 29 cents per share, an improvement of $1.2 billion from the third quarter of 2008. Pre-tax operating profit totaled $1.1 billion, an improvement of $3.9 billion from a year ago. It is Ford's first pre-tax operating profit since the first quarter of 2008
* Ford North America posted a pre-tax operating profit of $357 million, its first profitable quarter since the first quarter of 2005
* Reduced Automotive structural costs by $1 billion, bringing the total reduction to $4.6 billion through the first nine months of 2009, and exceeding the full-year target of $4 billion
* A strong product lineup drove market share gains in North America, South America and Europe as well as continued improvements in transaction prices and margins
* Ended the quarter with $23.8 billion of Automotive gross cash, up $2.8 billion from the end of second quarter 2009++
* Achieved positive Automotive operating-related cash flow of $1.3 billion for the third quarter, a $2.3 billion improvement over the second quarter
* Ford Credit reported a pre-tax operating profit of $677 million, a $516 million improvement from a year ago
* Ford now expects to be solidly profitable in 2011, excluding special items, with positive operating-related cash flow

DEARBORN, Mich., Nov. 2, 2009 – Ford Motor Company [NYSE: F] today reported net income of $997 million, or 29 cents per share, in the third quarter as strong new products, structural cost reductions and improved results at Ford Credit lifted the company's results despite continued weak global economic conditions. This is a $1.2 billion improvement compared with the same period last year.

Excluding special items, Ford posted pre-tax operating profits totaling $1.1 billion, an improvement of $3.9 billion from a year ago. This marks the company's first operating profit since the first quarter of 2008. On an after-tax basis, excluding special items, Ford posted an operating profit of $873 million in the third quarter, or 26 cents per share, compared with a loss of $3 billion, or $1.32 per share, a year ago.

Ford's North American operations posted a pre-tax operating profit of $357 million, its first quarterly profit since the first quarter of 2005. Ford South America, Ford Europe and Ford Asia Pacific Africa also posted pre-tax operating profits in the third quarter.

"Our third quarter results clearly show that Ford is making tremendous progress despite the prolonged slump in the global economy," said Ford President and CEO Alan Mulally. "Our solid product lineup is leading the way in all markets. While we still face a challenging road ahead, our One Ford transformation plan is working and our underlying business continues to grow stronger."

Ford's third quarter revenue was $30.9 billion, down $800 million from the same period a year ago. Automotive revenue is up $100 million from a year ago. This improvement was offset by a decrease in Ford Credit's revenue reflecting a decline in receivables.

Ford reduced its Automotive structural costs by $1 billion in the quarter, largely driven by lower manufacturing and engineering costs, which included benefits from improved productivity, personnel reduction actions primarily in North America and Europe, and progress on implementing its common global platforms and product development processes. Through the first nine months, Ford has achieved $4.6 billion in Automotive structural cost reductions, exceeding its full-year 2009 target of $4 billion.

Ford finished the third quarter with $23.8 billion in Automotive gross cash, compared with $21 billion at the end of the second quarter of 2009. Automotive operating-related cash flow was $1.3 billion positive during the third quarter of 2009, an improvement of $2.3 billion from the second quarter 2009. Automotive operating-related cash flow was $3.4 billion negative during the first nine months.

"The Ford team delivered another solid quarter of results with strong contributions from all our business regions," said Lewis Booth, Ford executive vice president and chief financial officer. "Positive cash flow, a stronger balance sheet and a third quarter operating profit are evidence that Ford is meeting the global economic challenges."

The following discussion of third quarter highlights and results are on a pre-tax basis and exclude special items. See tables following "Safe Harbor/Risk Factors" for the nature and amount of these special items and any necessary reconciliation to U.S. GAAP. Discussion of Automotive overall operating cost changes is at constant volume, mix, and exchange, and excludes special items; discussion of Automotive structural cost changes is at constant exchange and excludes special items.

THIRD QUARTER HIGHLIGHTS

* Ford again increased year-over-year market share in North America, South America, and Europe and continued to achieve improvements in transaction prices and margins. Ford maintained market share in the Asia Pacific Africa region and Volvo gained market share. Other sales highlights:
o In the U.S., third quarter market share increased 2.2 percentage points compared to last year as the Ford, Lincoln and Mercury brands all posted sales gains
o Ford Europe's market share was 9.2 percent for the quarter, up 0.6 points from last year and the highest third-quarter level in 10 years. Market share was 10.1 percent in September, the highest monthly share in eight years
o Record growth in China continued as Ford third quarter sales jumped 63 percent
o At the end of the third quarter, worldwide sales of the new Ford Fiesta reached 470,000 units since its launch last fall. The No. 2 best-selling car in Europe posted its highest September sales since 1994. In September, Fiesta also had its best sales month ever in China. Fiesta arrives in the U.S. market in 2010
o Began selling the new Ford Taurus and Transit Connect in North America. Taurus sales in September were up 60 percent from a year ago
o The Ford Focus and Ford Escape were among the top new vehicles purchased in the U.S. government's "Cash for Clunkers" program
o Ford's U.S. hybrid sales have risen 73 percent this year compared to a 14 percent decline in U.S. hybrid industry sales. More than 60 percent of Ford Fusion hybrid sales have come from non-Ford owners
* Began production of the Ford Transit Connect small commercial van at the new manufacturing plant in Craiova, Romania
* Announced investment of $500 million at Ford India's Chennai assembly plant to build the new Ford Figo, a small car targeted at the heart of the Indian market, debuting in 2010
* Announced a new $490 million assembly plant in Chongqing, China, which will be completed by 2012, and will produce the Ford Focus for the Chinese market
* Ford, Lincoln and Mercury brand vehicles in the U.S. had the fewest number of "things gone wrong" among all automakers, according to the third quarter GQRS study of new vehicle quality
* Received $886 million in loans from the U.S. Department of Energy for development of more fuel-efficient vehicles. Ford has been approved for up to $5.9 billion in loans in support of projected expenditures through mid-2012
* Raised $565 million in new equity as Ford completed its previously-announced plan to issue up to $1 billion of equity
* Ford Credit completed $10 billion in funding in the third quarter, including $2.8 billion unsecured, and now has essentially completed its full-year funding plan
* The Ford Taurus and Lincoln MKT both earned a "Top Safety Pick" from the Insurance Institute for Highway Safety. Ford Motor Company continues to have more IIHS "Top Safety Pick" ratings than any other automaker
* Unveiled the all-new Ford C-MAX at the Frankfurt Motor Show. The C-MAX and the Grand C-MAX will debut in Europe in 2010, and the Grand C-MAX debuts in the U.S. in 2011. The new global C-car platform will underpin up to 10 models and more than 2 million units annually by 2012
* Announced that Ford's 1.6-liter and 2.0-liter four-cylinder EcoBoost engines will make their debut in 2010 across Europe, North America, and Australia
* Unveiled the new Ford Figo to compete in India's small car segment beginning in 2010
* Launched the new Ford Fiesta in Taiwan and continued the successful rollout of the Ford Focus and Ford Everest SUV in additional Asian markets
* Revealed the new 2011 Ford F-Series Super Duty and two new powertrains developed by Ford – a 6.7-liter V8 diesel engine and a 6.2-liter V8 gasoline engine
* Began selling the 2010 Ford F-150 SVT Raptor, an off-road performance truck, which captured the "2009 Pickup Truck of Texas" award from the Texas Auto Writers. The Ford F-150 won the overall "Truck of Texas" award, the seventh straight year a Ford truck has earned the honor