Page last updated at 14:06 GMT, Friday, 24 April 2009 15:06 UK

Ford loss smaller than expected

Ford vehicles at a Michigan plant
Carmakers across the world have been struggling to cope

Carmaker Ford has reported better-than-expected results for the first quarter of 2009 and says it does not intend to take government aid.

While it still reported a loss for the quarter, of $1.4bn (£0.96bn), this was better than analysts had forecast.

The news sent Ford's shares up more than 16% in early trading.

Carmakers across the world have been struggling to cope with a massive slump in demand for cars as consumers hold back on making expensive purchases.

Two of Ford's biggest rivals, General Motors and Chrysler, have taken billions of dollars in US government aid and still face bankruptcy.

The latest results show that Ford has $21.3bn in cash and reiterate that, "based on current planning assumptions, it does not expect to seek a bridge loan from the US government".

Cost cutting

The first quarter results represent a significant improvement over its performance in the final quarter of last year.

Our results in the first quarter reflected the extremely difficult business environment and weak demand for autos around the world
Alan Mulally, Ford chief executive

During those three months, Ford lost $5.9bn. Over the whole of 2008, the carmaker lost a record $14.6bn.

In addition, the company used up less of its cash. In the first quarter of 2009 it used up $3.7bn of its cash reserves, whereas in the final quarter of 2008 it used up $7.2bn.

A year ago, Ford had reported a first-quarter profit of $70m.

"Our results in the first quarter reflected the extremely difficult business environment and weak demand for autos around the world," said Ford boss Alan Mulally.

The carmaker has been slashing costs in an attempt to offset the slump in sales, and cut its debt obligations by $10.1bn during the quarter.

"Ford made strong progress on our transformation plan by gaining share with new products, reducing outstanding debt, lowering our structural costs and reaching new agreements with the United Auto Workers [union]," Mr Mulally added.

Ford Europe's market share rose to 9.4%, its highest level in nearly ten years, with the Ford Fiesta becoming the continent's best selling car in March, the carmaker said.

The overall quarterly loss for the European arm of the company was $550m, compared with a profit of $737m a year ago. Revenue was $6bn, down from $10.2bn.

Overall revenue fell to $24.8bn from $39.2bn in the same period last year.

Ford asserted that it would "remain on track to meet or beat its financial targets".

These include at least breaking even in 2011, excluding special items.



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