Ford Motor Company (F) Q4 2007 earnings summary

Executive summary

• FY2007 net loss narrowed to $2.7B from $12.6B in 2006; revenue rose to $172.5B from $160.1B.

• Turnaround priorities centered on restructuring North American operations, refreshing products, funding the plan, and improving the balance sheet.

• Jaguar and Land Rover were classified as held for sale in Q4; a sale was expected to close in Q2 2008.

Financial highlights

• Revenue was $172.455B; pretax loss was $3.746B, versus a $15.074B loss in 2006.

• Net loss was $2.723B, or $1.38 per share, compared with $12.613B, or $6.72 per share, in 2006.

• Automotive sales increased to $154.379B from $143.249B; reported operating loss narrowed to $4.268B from $17.944B.

• Financial Services pretax income fell to $1.224B from $1.966B; revenues increased to $18.076B from $16.816B.

• Automotive special items totaled a $3.872B charge, including a $2.4B Volvo goodwill impairment and a one-time $1.099B variable-marketing charge.

Outlook and guidance

• FY2008 total pretax results, including special items, were expected to remain a loss but improve on 2007; Automotive results were also expected to improve.

• North American and total Automotive operations remained targeted for profitability in 2009; annual North American cost reductions targeted ~$5B by end-2008 versus 2005.

• 2008 planning assumed U.S. industry volume of 16M units and U.S. share at the low end of 14–15%; automotive costs targeted to improve ~$3B.

• Ford Credit was expected to remain profitable in 2008, at a lower level than 2007; year-end managed receivables projected at $130B–$140B.

• Automotive operating-related cash outflows of $7B–$8B and personnel-separation cash costs of $5B–$6B were projected for 2007–2009.