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Ford Motor posts $1 billion profit


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I don't put too much weight in a profitable quarter that was funded by the federal government. Ford made a profit because of Cash for Clunkers that gave them record sales in the 3rd quarter. Otherwise, it would have been another money losing quarter. Losses will be back in the 4th quarter without C4C.

 

They still need to pay back the debt they accumulated to survive during their $14.5 billion losses last year.

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I don't put too much weight in a profitable quarter that was funded by the federal government. Ford made a profit because of Cash for Clunkers that gave them record sales in the 3rd quarter. Otherwise, it would have been another money losing quarter. Losses will be back in the 4th quarter without C4C.

 

They still need to pay back the debt they accumulated to survive during their $14.5 billion losses last year.

 

You really aren't too informed...........C4C had little to do with Ford's profit, cost cutting was much more important and will be in the future. Pay attention to the forward looking comments, sounds cautiously optimistic to say the least.

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I think this profit is a result of a multi-tier approach to business. Mulally has been cutting costs on a consistant basis. They've also idled plants and reduced the workforce in painful steps to assist the company in the harsh economic climate.

 

At the same time, C4C arrived at a time when significant cost cutting measures had been implemented. This coupled with Fords new models being brought out with stunning reviews and public awareness that Ford took no gov mint funds to survive all contributed in my opinion.

 

Regardless of how we got there, its great news that should be celebrated. Congrats to everyone on a job well done. Lets hope we can keep it rolling.

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Moving production of some of their most important vehicles (the mid-sized car lines) to Mexico a few years ago looks like a smarter decision each day.

 

So, we want to make this thread a free-for-all too? Are you sure? I guess we could have another thread closed. Up to you guys. Personally, I would rather just talk about how Ford is doing well.

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record sales in the 3rd quarter

Ford, as a whole, did not have a record setting 3rd quarter.

 

BTW: Every geographic unit turned a profit. Probably the first time that's happened in a decade or more.

 

Absent C4C, I'd say Ford at least breaks even in NA and still turns in a decent profit world wide.

 

Net margin on NA volume is quite narrow (less than 3%), and if the interest costs for NA loans were booked against NA operations (instead of broken out separately) Ford likely would not have turned a profit in NA.

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When they post a profit for the whole year, then it's time for a party, but as it stands, there's some time to go before that occurs.

 

If Ford post positive/or very small negative for the 4th Quarter, then the whole year profit will be possible. Let's see the sales data tomorrow, it can give some hint.

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I love this for a number of reasons but 2 (ok, 3) stick out in my mind:

 

1) It tells the public what Ford's been saying all along and what many in the public think already: See? We had a plan, it was painful for our workers, but we are making it work on our own---and we're MAKING MONEY w/o government help.

 

2) It sets the stage for investor confidence---Ford can now do (if they choose) another debt for equity swaps, using the power of that confidence (investors are more and more likely to believe Ford's stock will appreciate and are more willing to swap debt for equity). That also means swaps are generally less dilutive if the stock continues to appreciate (sure, I own less of Ford if they issue more shares, but less debt should mean an increase in share price, I get that "loss" back that much quicker--if I am existing shareholder).

 

3) It provides increasingly greater flexibility for Ford---to make the investments in plants, to stay the course of continuous improvement/redesign in it's vehicles, etc.

 

I may be overstating one quarter of profit---but I really don't think I am when comparing Ford to the industry.

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I may be overstating one quarter of profit---but I really don't think I am when comparing Ford to the industry.

 

Well, it may be overstating the results of the quarter, but the details of this quarter's results are pretty telling about where things could be headed going into next year, which is starting to look very positive.

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Without government help? did they not last or the previous receive a loan of 6.9billon for retooling of plants to build more fuel efficient cars!. That loan flew under the radar of the public, and I bet any other future loans will as well.

 

Those loans were offered from the Department of Energy, and were available to all automakers for the development of more efficient vehicles. It was not in any sense of the word a "bailout", which is why it went under everyone's radar, as it should have. There's a heck of a big difference between guaranteed loans with special interest rates (which private banks often offer to preferred customers during healthier financial times) than free handouts in exchange for government ownership.

Edited by NickF1011
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Bear in mind, though, that the Q2 profit was strictly due to a change in liabilities, not favorable business results.

That was driven largely by the approx. $3.4 billion gain on debt-reduction actions that showed up on the income statement for Q2, correct?

 

This makes the positive cash flow in Q3 even more meaningful.

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