(Reuters) – Ford Motor Co (F.N) said on Monday it expects to post a pretax loss of about $600 million for the first quarter as the coronavirus outbreak pummeled its operations, resulting in a 21% drop in vehicle sales to dealers versus the same quarter in 2019.
FILE PHOTO: The front grill logo of a Ford pickup truck is seen in this photo taken in Carlsbad, California November 5, 2014 REUTERS/Mike Blake
The news sent Ford’s shares down more than 5% in morning trading.
Only Ford’s joint ventures in China, where the COVID-19 pandemic has been receding, are currently producing vehicles. The automaker said it is working on a scenario for a phased restart of its manufacturing plants beginning in the second quarter.
“However, we believe we have sufficient cash today to get us through at least the end of the third quarter with no incremental vehicle production and wholesales or financing actions,” Chief Financial Officer Tim Stone said in a statement.
As of April 9, Ford said it had about $30 billion in cash on its balance sheet, including $15.4 billion it borrowed last month against two existing credit lines.
Ford said any decisions on restarting its plants will be made “in cooperation with local unions, suppliers, dealers and other stakeholders.”
In March, the company shuttered plants in North America and Europe due to the spreading pandemic.
Earlier this month, the No. 2 U.S. automaker said its first-quarter U.S. sales had fallen 12.5% during the quarter. The U.S. market with its highly profitable pickup truck and SUV segments generates the overwhelming majority of Ford’s profits.
Ford’s U.S. sales chief Mark LaNeve said on April 2 that Ford believes some level of government stimulus will be needed for American consumers once the COVID-19 pandemic recedes.
Ford said it expects its first-quarter adjusted loss before interest and taxes to be about $600 million, compared with a profit of $2.4 billion a year earlier.
The company said it expects to report revenue of about $34 billion for the quarter.
In morning trade, Ford shares were down 28 cents, or 5.2%, at $5.09.
Reporting by Rachit Vats in Bengaluru and Nick Carey in Detroit; Editing by Aditya Soni and Dan Grebler