Summary
Ford Motor Company reported a significant turnaround in its second quarter of 2009, with a net income attributable to Ford Motor Company of $2.26 billion, or $0.69 per diluted share, a substantial improvement from a net loss of $8.7 billion, or ($3.89) per diluted share, in the same period of 2008. This dramatic swing was largely driven by a massive $3.4 billion gain on debt reduction actions and a $1.2 billion gain from the conversion of convertible notes, significantly offsetting operational challenges. The Automotive sector, while still facing revenue declines of 35% year-over-year due to lower volumes and the non-recurrence of Jaguar Land Rover sales, showed a significant improvement in pre-tax income due to the absence of major impairment charges from the prior year and substantial gains from debt management. The Financial Services sector also demonstrated a strong recovery, primarily due to the non-recurrence of a large operating lease impairment charge and improved auction values for leased vehicles. Despite the positive net income in the quarter, Ford's liquidity remained a key focus. The Automotive sector's gross cash stood at $21.0 billion, but the company had drawn down $10.1 billion on its revolving credit facility. Ford Credit's funding strategy continued to rely on government-sponsored programs and securitizations amidst volatile credit markets. While the company achieved significant debt reduction through various transactions, its overall debt levels remained substantial, and credit ratings continued to be a concern.
Financial Highlights
32 data points| Revenue | $26.81B |
| Cost of Revenue | $23.35B |
| Gross Profit | $3.46B |
| SG&A Expenses | $3.11B |
| Operating Expenses | $28.55B |
| Operating Income | $829.00M |
| Interest Expense | $1.68B |
| Net Income | $2.26B |
| EPS (Basic) | $0.75 |
| EPS (Diluted) | $0.69 |
| Shares Outstanding (Basic) | 3.00B |
| Shares Outstanding (Diluted) | 3.35B |
Key Highlights
- 1Ford reported a net income of $2.26 billion in Q2 2009, a substantial improvement from a net loss of $8.7 billion in Q2 2008.
- 2Automotive sector revenue decreased by 35% year-over-year to $24.0 billion, impacted by lower wholesale volumes.
- 3Significant gains from debt reduction actions ($3.4 billion) and convertible note conversions ($1.2 billion) heavily influenced the reported net income.
- 4The Automotive sector's pre-tax income improved significantly due to the absence of large impairment charges from the prior year.
- 5Ford Credit's pre-tax income saw a substantial improvement, driven by the non-recurrence of operating lease impairments and better auction values for vehicles.
- 6Automotive sector gross cash was $21.0 billion at the end of Q2 2009, but the company had drawn $10.1 billion on its revolving credit facility.
- 7Ford Credit faced ongoing challenges in credit markets, relying on government-sponsored programs and securitization for funding.