Ford Motor Co. said today that its second-quarter loss will widen to more than $5 billion before interest and taxes as the automaker seeks to recover from the novel coronavirus (COVID-19).
The Dearborn, Mich.-based automaker posted a first-quarter deficit of $632 million before interest and taxes. The company reported a net loss of $1.99 billion, or 50 cents a share. That compares with a first-quarter 2019 profit of $1.15 billion, or 29 cents a share.
Ford’s quarterly revenue dropped to $34.3 billion from $40.3 billion a year earlier.
The company said it expects vehicle sales to fall in all regions compared with last year.
Ford shut down factories as COVID-19 created health concerns at plants and shut down demand for new vehicles. The automaker said COVID-19 represented a $2 billion hit on the earnings before interest and taxes figure. Ford is not making a full-year forecast at this time.
Ford Motor reported having $35.1 billion in cash at the end of the quarter while its Ford Credit vehicle-financing unit had $28 billion. The company has tapped credit lines to bolster its cash position.
“We believe the company’s cash is sufficient to take us through the end of the year,” Chief Financial Officer Tim Stone said in a statement.
Ford has been among the most active manufacturers in using its plants to make medical supplies used for treating COVID-19 patients. The company has worked with other manufacturers, including making ventilators in collaboration with 3M and General Electric Co.
“Ford people are keeping each other safe, limiting the spread of the virus, safeguarding healthcare workers and first responders, and taking care of customers,” CEO Jim Hackett said in a statement.
Nevertheless, Ford faced major challenges before the coronavirus outbreak. It’s developing new electric and self-driving vehicles while relying on large pickups and sport-utility vehicles for profit. COVID-19 struck at a critical time for Ford.
The automaker has been restarting operations in China, where the coronavirus originated, and said it plans to resume some operations in Europe next week. The biggest question is when the company’s North American operations, its main source of profit, will resume production.
The United Auto Workers, which represents U.S. production workers at Ford, said last week early May was too soon to begin production.