10-QPeriod: Q1 FY2011

FORD MOTOR CO Quarterly Report for Q1 Ended Mar 31, 2011

Filed May 10, 2011For Securities:FF-PCF-PDF-PB

Summary

Ford Motor Company reported a strong first quarter for 2011, demonstrating significant year-over-year improvement in net income attributable to Ford Motor Company, which rose to $2.55 billion from $2.09 billion in the prior year's first quarter. This growth was driven by a substantial increase in Automotive sector income before taxes, which more than offset a decline in Financial Services sector income. Total sales and revenues also saw an increase, indicating a healthy rebound in the company's core automotive business. The company's balance sheet also showed notable improvement, with a substantial increase in cash and cash equivalents, reflecting strong operational cash flow generation. The reduction in debt levels, particularly the retirement of a significant portion of subordinated convertible debentures, further strengthens the company's financial position. These positive financial trends suggest Ford is successfully executing its strategic plan and is well-positioned for continued operational and financial recovery.

Financial Highlights

36 data points
Beta

Revenue

$33.11B

19.1% Gross Margin

Net Income

$2.55B

7.7% Net Margin

EPS (Diluted)

$0.61

Total Assets

$167.39B

Cash & Equivalents

$21.32B

Free Cash Flow

$2.50B

Financial Statements
Beta
Revenue$33.11B
Cost of Revenue$26.78B
Gross Profit$6.34B
SG&A Expenses$2.73B
Operating Expenses$30.63B
Operating Income$2.55B
Interest Expense$1.17B
Net Income$2.55B
EPS (Basic)$0.68
EPS (Diluted)$0.61
Shares Outstanding (Basic)3.77B
Shares Outstanding (Diluted)4.27B

Key Highlights

  • 1Net income attributable to Ford Motor Company increased by 22% year-over-year to $2.55 billion in Q1 2011.
  • 2Total sales and revenues grew by 5% year-over-year to $33.11 billion in Q1 2011.
  • 3Automotive sector income before income taxes surged by 57% to $2.07 billion.
  • 4Cash and cash equivalents increased significantly, rising from $14.8 billion at the end of 2010 to $21.3 billion at the end of Q1 2011.
  • 5Total Automotive sector debt decreased, notably through the redemption of $3 billion in Trust Preferred Securities, reducing annualized interest costs.
  • 6Diluted earnings per share improved to $0.61 in Q1 2011 from $0.50 in Q1 2010.

Frequently Asked Questions

The primary driver of Ford's improved financial performance was a significant increase in the profitability of its Automotive sector. Income before income taxes for the Automotive sector rose by $750 million to $2.07 billion, driven by higher sales volumes, favorable mix, and improved net pricing, which more than offset increased commodity and structural costs.

The Financial Services sector experienced a decline in income before income taxes, falling by $109 million to $706 million in the first quarter of 2011, compared to the same period in 2010. This decrease was attributed to lower market valuation adjustments on derivatives and less favorable residual performance on leases.

Ford's liquidity position strengthened considerably in the first quarter of 2011. Automotive gross cash (cash, cash equivalents, and marketable securities) increased to $21.3 billion from $20.5 billion at the end of 2010. The company also reported significant available credit lines, contributing to a total Automotive liquidity of $30.7 billion at March 31, 2011. This robust liquidity reflects strong cash generation from operations.

Ford significantly reduced its debt by redeeming its entire $3 billion of outstanding Trust Preferred Securities on March 15, 2011. This action is expected to lower annualized interest costs by approximately $190 million.