Ford Motor stated on Tuesday its second-quarter loss would be more than $5 billion from $2 billion in the first quarter because of the spread of the coronavirus pandemic, but added it had enough money regardless of the crisis to last the rest of 2020.
“We believe the company’s cash is enough to take us through the end of the year, even with no additional vehicle wholesales or financing actions,” Chief Financial Officer Tim Stone stated.
But he referred the present economic environment as “too ambiguous” for the automaker to provide a full-year 2020 earnings forecast.
“There’s no denying the negative economic consequences of a pandemic,” CEO Jim Hackett said on a conference call.
The automaker has cut costs during the COVID-19 outbreak to weather the shutdown, including reduction in salaries of executives and white-collar workers.
Ford also moved to cut expenditures on projects, and is pushing back its commercial autonomous vehicle services by a year to 2022. It had decided not to develop an earlier announced luxury electric Lincoln sport utility vehicle in collaboration with electric automaker Rivian.
Ford shares dropped more than 4.6% in after-hours trading on Tuesday after closing the regular session at $5.38.
Ford’s market value of $20.6 billion is now below $35 billion in cash it had on hand as of last Friday, a sign that investors expect the automaker to burn through significant amounts of cash before a recovery takes hold.
The automaker had pre-announced the pandemic-fueled first-quarter loss previously this month. That warning came the same day the automaker raised $8 billion from corporate debt investors.
In the previous month, Ford moved to hoard cash on its balance sheet, drawing down $15.4 billion from two credit lines and postponing its dividend, in a move to bolster reserves to ride out losses to its business.
