By Allison Prang and Mike Colias 

Ford Motor Co. reported a larger pretax loss, adjusted for one-time items, than the company was expecting and said that number is expected to top $5 billion in the current quarter.

Ford also said Tuesday that it has about $35 billion in cash, enough to cushion it through the end of the year even if it were unable to resume factory output because of the Covid-19 outbreak. Ford and other major auto makers have idled their plants in the U.S., Europe and elsewhere since mid-March.

Ford said its first-quarter adjusted loss before taxes was $632 million and that the pandemic drained at least $2 billion from its earnings in the period. The auto maker said earlier this month it expected adjusted pretax earnings of about $600 million and a 16% drop in revenue.

Ford overall reported a net loss of $1.99 billion, or 50 cents a share, and revenue of $34.32 billion, down 15% from a year earlier. According to FactSet, analysts expected a loss of 8 cents a share and $34.69 billion of revenue.

Car production was halted last month and demand in the industry has slowed because of the pandemic, but The Wall Street Journal this week reported that major car manufacturers, including Ford, are planning to partly reopen factory production in the U.S. starting May 18. Ford said Tuesday that it would begin opening European plants next week.

Since closing its European and U.S. factories last month, the company has bolstered its cash reserves. It eliminated its dividend, tapped about $15 billion in credit lines and issued $8 billion in unsecured debt.

"Our objective is not just to withstand the crisis," finance chief Tim Stone said during a media conference call. "We're assuring the flexibility to continue to invest in our future."

Mr. Stone said the cash cushion should allow Ford to continue investing in vehicle-development programs. Still, some projects are likely to get delayed or even succumb to the Covid-19 crisis. Ford confirmed Tuesday that it has canceled plans for a Lincoln-brand electric vehicle that was to be developed with startup truck maker Rivian Automotive.

The coronavirus outbreak came at a difficult time for Ford. The company is in the early stages of a multiyear plan to close factories and lay off thousands of workers in Europe and South America, regions where Ford is repositioning itself as a smaller player focused on more-profitable market segments like commercial trucks and vans.

As of February, Ford had spent $1.1 billion for its plan, whose cash cost is expected to total $7 billion when the overhaul is completed within a few years. Heavier costs from fresh debt, combined with a cash burn from closed plants, could complicate the restructuring, analysts have said.

Mr. Stone said Tuesday that the plan was on course.

The overseas changes constitute the largest piece of a turnaround effort initiated by Chief Executive Jim Hackett, who took the top job three years ago. Mr. Hackett also has overseen an overhaul of Ford's vehicle offerings, paring most passenger cars and betting bigger on trucks and sport-utility vehicles, such as a forthcoming Ford Bronco.

He also has steered Ford into long-term bets on driverless-car development and personal-mobility plays, including the acquisition of an electric scooter company.

Ford said Tuesday that it has pushed back its 2021 target date to begin an autonomous-vehicle service to 2022. The company, which is working on driverless-car technology with Pittsburgh-based startup Argo AI, said it wants to re-evaluate the long-term effect of the pandemic on consumer behavior but that its technology remains on track.

Write to Allison Prang at allison.prang@wsj.com and Mike Colias at Mike.Colias@wsj.com

 

(END) Dow Jones Newswires

April 28, 2020 17:53 ET (21:53 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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