Ford Surprises Everyone, Reports Profit For The Second Quarter

Ford Surprises Everyone, Reports Profit For The Second Quarter

On Thursday, the second-biggest carmaker of the US, Ford Motor Co., surprised everyone by reporting a net profit of $1.1B in the second quarter of the financial year, after making several warnings in the past, particularly in April, when it said that the situation might get worse and the loss is expected to be more than double the last year, reaching $5B.

The better than the expected situation for Ford is due to the investment done by Volkswagen in company’s Argo unit, Ford’s self-driving AI-based model, of more than $2.6B, thus, covering the automaker’s net loss for the quarter. However, the US carmaker expects an overall loss for 2020, primarily due to the delay company’s three product launches getting delayed due to the COVID pandemic. Nevertheless, the company also reported that it has enough cash in hand to survive the corona crisis year and would work smoothly even if the second wave causes another lockdown in the world.

As a result of all this optimistic report, on Thursday, the share price of the automaker was up by more than 2.5% aftermarket orders.

Further, the company also reported that they expect the next quarter to be profitable with a pre-tax profit net income lying between $500M and $1.5B but also expects a loss in the fourth quarter.

Meanwhile, the Detroit based firm has also partly repaid its credit facilities, i.e. out of outstanding $15.4B; $7.7B was paid by the automaker. The firm also extended $4.8B of its credit lines, for three years.

Moreover, if the company excludes the VW automaker’s investment and other items, then it has reported a loss of $1.9B, which translates to around 35 cents per share. In comparison, the experts predicted a net loss of $1.17 a share for the company, which is much more than the actual.

Comparing the current quarter’s profit of $1.1B, that translates to 28 cents per share, with the gain of just $100M last year, during the same period, Ford Surprises seems to perform better this year.

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