Ford Posts Record Loss of $12.7B in 2006 Thursday January 25, 8:07 am ET By Tom Krisher, AP Business Writer Ford Posts $12.7 Billion Loss in 2006, the Largest Annual Loss in Automaker's 103-Year History
DEARBORN, Mich. (AP) -- Ford Motor Co. lost $5.8 billion in the fourth quarter amid slumping sales and huge restructuring costs, pushing the fabled automaker's deficit for the year to $12.7 billion, the largest in its 103-year history.
ADVERTISEMENT The annual loss of $6.79 per share reported Thursday surpassed its previous record for a year of $7.39 billion set in 1992. It earned $1.44 billion, or 77 cents a share, in 2005.
The Dearborn-based company expects more losses for this year. It expects to burn up $10 billion in cash on automotive operations through 2009 and spend another $7 billion to invest in new products.
The fourth-quarter loss was the worst final-quarter loss in Ford's history and its second-worst quarterly performance. Ford lost $6.7 billion in the first quarter of 1992, due mainly to accounting rule changes on health care liabilities.
"We began aggressive actions in 2006 to restructure our automotive business so we can operate profitably at lower volumes with a product mix that better reflects consumer demand for smaller, more fuel-efficient vehicles," Alan Mulally, president and chief executive officer, said in a statement. "We fully recognize our business reality and are dealing with it. We have a plan and are on track to deliver."
Excluding special items, Ford lost $1.50 per share in all of 2006, worse than Wall Street predicted. Fourteen analysts polled by Thomson Financial expected a loss of $1.35 per share for the year, excluding special items.
Its shares fell 10 cents to $8.10 in premarket trading.
Ford said that special items associated with restructuring costs totaled $9.9 billion for the year as the company continues efforts to shrink itself to match reduced demand for its cars and trucks.
Sales for the fourth-quarter fell to $40.3 billion from $46.3 billion a year ago, while annual sales dropped to $160.1 billion from $176.9 billion in 2005. |