Ford expected to post third straight quarterly loss

Posted Apr 23rd 2008 1:18PM by Brian White
Filed under: Earnings Reports, Ford Motor (F)

When Ford Motor Co. (NYSE: F) sends up its quarterly results tomorrow, the automaker is expected to report its third straight loss, due largely to falling truck sales. Two-thirds of Ford's business come from the sale of large and light trucks -- and that segment continues to see disastrous results as the bloodbath from rising gas prices gets worse.

Right now, the average price for 87-octane gas stands at about $3.50 per gallon, on the back of $119 crude oil barrel prices. Want more? Oil magnate T. Boone Pickens believes oil barrel prices are headed for $125. Who knows -- they could shoot past that. Are you looking forward to $4 per gallon gas this summer? Be prepared. And if you were planning on a Ford truck purchase and are now pulling back, you're probably joining hundreds of thousands of fellow consumers being swayed by record oil prices.

Investors need to see progress on Ford CEO Alan Mulally's "Way Forward" plan as well as the immediate steps that are being taken to head off record oil prices that make a huge dent in Ford's large-vehicle and truck sales. It's hard to imagine a global automaker being able to respond with a product mix that twists and turns as fast as oil prices shoot up, but that's one of the only things that may get the market excited about its shares tomorrow and for future quarters as well.

Way Forward was unveiled in 2006. It's two years later, gas has gone through the roof, and Ford still sells a majority of its vehicles in the truck segment of gas-hogging transportation -- and customers are cutting back. What to do? With U.S. sales declining 8% in the first quarter of 2008, and sales of Ford trucks having dropped for 17 straight months, Ford will lumber through the rest of 2008 and perhaps make it back to profitability sometime in 2009. It can't come soon enough.

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