Ford Motor Co on Thursday said it expects a full-year loss but added it should have ample cash on hand throughout the rest of 2020, even if global demand falls further or the COVID-19 pandemic forces more shutdowns of vehicle assembly plants.
The No. 2 U.S. automaker also said that on July 27 it repaid $7.7 billion of an outstanding $15.4 billion on its revolving credit facilities, and extended $4.8 billion of its three-year revolving credit lines.
Ford’s comments came as the company posted a quarterly profit thanks to an investment by Volkswagen AG in its self-driving Argo AI unit, more than offsetting a loss caused by a coronavirus-induced production shutdown.
The better-than-expected results and earnings outlook sent Ford’s shares up 4% in after-market trading.
“It’s a good quarter for Ford in light of the circumstances,” Chief Financial Officer Tim Stone told reporters on a conference call.
German automaker VW closed its $2.6 billion investment in Argo last month.
Ford said it expects a pre-tax profit of between $500 million and $1.5 billion for the third quarter and a loss for the fourth quarter, which features three significant product launches delayed by the shutdown earlier this year.
In April, Ford warned that its second quarter loss would more than double to more than $5 billion due to the coronavirus outbreak.
Stone said a focus on cost-cutting, a productive restart following a two-month production shutdown, strong performance by the automaker’s captive finance arm and a solid pricing environment for its vehicles had helped mitigate the anticipated loss.
The automaker said it ended the quarter with nearly $40 billion in cash, and should be able to maintain or exceed its target cash balance of $20 billion for the rest of 2020, even if global auto demand falls or if COVID-19 forces another big wave of plant closures.
Ford reported net income in the second quarter of $1.1 billion, or 28 cents a share, compared with a profit of $100 million, or 4 cents a share, a year earlier.
Excluding items, Ford posted a second-quarter operating loss of $1.9 billion, or 35 cents a share.
Analysts had expected a loss for the quarter of $1.17 per share.
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