Funds News

UPDATE 4-Ford posts smaller-than-expected loss; shares jump

 * Q1 continuing ops loss 75 cents per share
 * Per-share loss smaller than analysts expected
 * Says won't seek U.S. government loans
 * Ford shares rise as much as 20 percent
 (Adds analysts' remarks, details from conference call)
 By David Bailey and Poornima Gupta
 DETROIT, April 24 (Reuters) - Ford Motor Co F.N posted a
smaller-than-expected first-quarter loss and said it was on
track to at least break even in 2011 and did not expect to seek
U.S. government loans, sending its shares up as much as 20
 The company also said on Friday that it had burned through
$3.7 billion of automotive sector cash in the first quarter, a
sharp drop from the second half of last year, and ended March
with $21.3 billion in gross cash.
 Investors have been more focused on Ford's liquidity and its
ability to navigate the economic downturn, as well as on the
financial struggles of rivals General Motors Corp GM.N and
Chrysler, than on the quarterly results.
 Ford has not sought U.S. government aid, setting it apart
from GM and Chrysler, which are operating on $17.4 billion of
federal loans and have sought more to stave off bankruptcy.
 "We think that Ford is successfully differentiating itself
from its wounded domestic competitors in operating performance
and with consumers," Standard & Poor's equity analyst Efraim
Levy said in a note. "However, profitability remains challenged
and we still see risks."
 Ford posted a net loss of $1.43 billion, or 60 cents per
share, for the first quarter, compared with net income of $70
million, or 3 cents per share, a year earlier.
 The loss from continuing operations and excluding one-time
items came to 75 cents per share. Analysts on average expected
a loss of $1.23 on that basis, according to Reuters Estimates.
 The results reflected the weak demand for autos around the
world, with losses in each region. Revenue fell to $24.8
billion in the quarter, from $39.2 billion a year earlier.
 Still, Chief Financial Officer Lewis Booth called the
results encouraging and said the automaker expected the first
quarter to have the worst cash burn of the year.
 Booth said Ford risked being at a disadvantage if GM or
Chrysler should file for bankruptcy, but the automaker has been
preparing contingency plans should such a filing lead to
disruptions in its parts supply base.
 Ford had burned through $21 billion of automotive cash in
2008, including more than $7 billion in both the third and
fourth quarters of last year.
 JP Morgan analyst Himanshu Patel said Ford's first-quarter
results were solid on balance "given the current climate."
 "We expect a positive reaction, and continue to believe
Ford's recent rally is not unjustified but see only modest
incremental upside potential in the equity at these levels,"
Patel said in a note to clients.
 Merrill Lynch raised its rating on Ford to "buy" and set a
$7.50 price target on Friday, saying that the easing of the
automaker's cash burn rate made it more likely that it would
make it through 2009 without need of government support, and
with little risk of bankruptcy.
 Ford posted a 2008 net loss of $14.7 billion, a company
record, and has reported losses of about $30 billion over the
past three years. The turnaround plan would have it at least
break even in its pretax automotive operations in 2011.
 The automaker borrowed more than $23 billion in late 2006
to support the restructuring in case of an industry downturn,
using most of its remaining assets, including the familiar blue
oval logo, as collateral.
 In the first quarter, special items increased Ford's pretax
profit by 15 cents per share, with a $1.32 billion gain from a
debt restructuring more than offsetting a $664 million
impairment charge for the Volvo car unit.
 Ford classified the Swedish Volvo brand as held for sale,
which implies that there is a probability of a sale in the next
year. The charge pushes the book value of the business down to
what Ford believes is the estimated fair market value.
 Ford has been in discussions with potential buyers for the
brand, the last one left from its former premier auto group. It
previously sold Aston Martin, Jaguar and Land Rover.
 The automaker also said it was raising its second-quarter
production forecast by 10,000 units in North America to 435,000
vehicles. However, that is still down some 250,000 vehicles
from its production a year earlier.
 Ford shares were up 74 cents, or 16.5 percent, at $5.23 in
early afternoon on the New York Stock Exchange, off an earlier
high at $5.40. They have risen from a 27-year-low of $1.02 in
November, when automakers were in the process of appealing for
emergency loans.
 (Reporting by David Bailey, Poornima Gupta and Ryan
Vlastelica; Editing by Lisa Von Ahn and Matthew Lewis)