Ford Motor Co. is expected to post its eighth straight quarterly loss on Thursday as investors focus on signs of progress in the automaker's turnaround and its sale of luxury brands, analysts said.
Ford, which lost $12.6 billion last year and another $282 million during the first quarter, is in the midst of executing a cost-cutting plan that will reduce jobs by nearly 40,000 through buyouts and plant closings.
About 27,000 of the automaker's union workers who accepted buyouts have already the left the company.
Ford's results come as the automaker begins talks with the United Auto Workers aimed at securing a new contract that would include sweeping concessions, particularly on the cost of benefits such as health care.
With labor negotiations on the horizon and general interest in a breakthrough health-care deal, we think investors are likely to largely ignore second-quarter earnings at Ford as long as they are in line with consensus, Lehman Brothers analyst Brian Johnson said.
Wall Street forecasts for Ford's second-quarter loss range from 15 cents to 74 cents per share, excluding items, according to Reuters Estimates.
The average estimate, based on the forecasts of 13 analysts, was for a loss of 40 cents per share. In the same period last year, Ford posted a revised loss of 6 cents per share. Ford stopped providing earnings forecasts last year.
UPDATE ON SALE
Ford executives are expected to face questions from analysts on the sale prospects of the automaker's Land Rover and Jaguar luxury brands.
Ford said last week it has had contact with interested parties for its two luxury lines and was evaluating the level of interest, but declined to provide further details.
The automaker, which has faced scrutiny over how it will raise and maintain liquidity as it restructures its money-losing North American operations, could get a cash-infusion from the sale of the two nameplates.
Analysts have focused on Ford's attempt to turn around its troubled U.S. operations, where it is in danger of losing the No. 2 spot in terms of market-share to Toyota Motor Corp.
Deutsche Bank Securities analyst Rod Lache said he expected that Ford's North American auto business lost $1.8 billion before taxes during the second quarter as sales slowed and it discounted more heavily in showrooms.
The main drivers for this year-over-year decline include negative volume, and negatives from higher incentives and material costs, Rod Lache, an analyst with Deutsche Bank Securities, said in a note to clients.
Ford's U.S. sales fell 9 percent during the second quarter as the automaker moved away from low-margin sales to car rental operators.
Lache and other analysts said a larger share of the vehicles Ford built during the second quarter were large sport- utility vehicles and pickup trucks. Those typically sell for more than the average vehicle, a trend analysts said pointed toward slightly better profit margins for Ford in the past quarter.
JP Morgan analyst Himanshu Patel said savings from a reduced payroll could help Ford beat cautious Wall Street estimates as it did in the first quarter.
Ford shares have gained 10 percent this year, partly on expectations that the automaker will get sweeping concessions from the UAW during the labor contract negotiations. On Wednesday, the shares were down 3.03 percent, or 25 cents, at $8.01 in late afternoon trading on the New York Stock Exchange.