The new Ford Focus C-Max Flexifuel car on display on September 29 at the Paris Mondial de l'Automobile in Paris, France. Ford Motor Company reported third-quarter losses of US$5.8 billion. - Reuters
DEARBORN, Michigan (AP):
Ford Motor Company said Monday its loss widened to US$5.8 billion in the third quarter, blaming the cost of its restructuring plan.
The company also said it plans to restate its earnings back to 2001 due to accounting errors involving derivative transactions.
The restatement is expected to effect financial results from 2001 until the third quarter of this year.
The company expected the restatement would improve results for 2002, but said other periods are under study.
Net loss
Ford's net loss of US$3.08 per share for the July-September period was larger than last year's third-quarter loss of US$284 million, or 15 cents per share.
Excluding restructuring costs, the company said it lost US$1.2 billion, or 62 cents per share, from continuing operations. Excluding special items in the third quarter of last year, Ford lost US$191 million, or 10 cents per share.
Wall Street had been expecting a loss of 61 cents per share for the quarter, according to a survey of analysts by Thomson Financial.
Ford's Chief Executive Alan Mulally called the results "clearly unacceptable."
"We are committed to dealing decisively with the fundamental business reality that customer demand is shifting to smaller, more efficient vehicles," Mulally said in a statement. "Our focused priorities are to restructure aggressively to operate profitably at lower volumes, and to accelerate the development of new, more efficient vehicles that customers really want.
Ford's turnaround plan aims to cut US$5 billion in costs by the end of 2008 by slashing 10,000 white-collar workers and offering buyouts to all of its 75,000 unionised employees.
The loss including restructuring costs was Ford's largest since the fourth quarter of 1992 of US$8.1 billion, which was due mainly to accounting changes.
Ford said special charges for the third quarter of 2006 totalled US$5.26 billion before taxes.
The charges included US$2.2 billion to revalue assets in North America and US$1.6 billion to decrease the value of Jaguar and Land Rover assets.
