By Ruth Bender
Ford Motor Co. posted a second-quarter operating loss of $1.9
billion from pandemic-related factory shutdowns, a better result
than it had previously warned of and reflecting a successful
restart of its North American plants since mid-May.
Revenue fell 50%, to $19.4 billion in the second quarter.
Ford lost 35 cents per share on a pretax basis adjusted for
one-time items, easily beating the average analyst forecast of a
$1.17 loss. The pretax loss of $1.9 billion was a reversal from a
$1.7 billion profit a year earlier.
Net income totaled $1 billion in the April-to-June period,
reflecting a $3.5 billion gain related to Volkswagen AG's recent
investment in the company's driverless-car startup, Argo AI.
Ford said it finished the quarter with about $39 billion in
cash, and also disclosed that it repaid $7.7 billion on a revolving
loan that it tapped this spring at the outset of the pandemic.
Ford's second-quarter result was worse than that of rival
General Motors Co., which posted a $536 million pretax loss and
breezed past Wall Street's forecasts.
The gap with GM was partly explained by the geographic footprint
of the two companies: GM's largest market is China, which recovered
from Covid-19 shutdowns during the quarter. Ford has a much smaller
presence in China and, unlike GM, produces cars in Europe, which
was hit by pandemic disruptions during the period.
(Previously)
BERLIN -- Volkswagen AG cut its proposed dividend Thursday after
swinging to a net loss in the second quarter, but the world's
biggest car maker by sales also said there were signs a recovery
was under way in markets from Western Europe to the U.S.
Volkswagen, which also makes the Audi and Porsche brands, posted
a net loss of EUR1.61 billion ($1.9 billion) in the second quarter
ended June 30, compared with a net profit of EUR3.96 billion during
the same period a year earlier. Revenue fell 37% to EUR41.08
billion from EUR65.19 billion as sales slipped across the world
because of economic shutdowns aimed at containing the pandemic.
"The first half of 2020 was one of the most challenging in the
history of our company due to the Covid-19 pandemic," said Chief
Finance Officer Frank Witter.
The coronavirus has plunged car makers around the world into one
of the deepest crises in recent years and added to struggles the
industry was already facing before the pandemic with softening
demand for cars and soaring costs for technology.
Renault SA on Thursday posted a net loss of EUR7.29 billion for
the first half of the year as the French auto giant reeled from the
effects of the pandemic as well as the woes of its alliance partner
Nissan Motor Co.
The plunge was more than twice the loss Renault posted for all
of 2009 during the financial crisis. It also outstripped analysts'
forecast of a EUR4.49 billion loss. Shares fell more than 5% in
early trading in Paris.
Nissan contributed EUR4.82 billion to Renault's loss for the
period as the Japanese firm wrote down assets affected by a
restructuring plan last year. Renault owns 43.4% of the Japanese
car maker as part of a globe-spanning auto alliance that also
includes Mitsubishi Motors Corp.
Volkswagen said that because of the heft of the impact from the
pandemic and difficulty in predicting the future, the company will
propose to shareholders to lower its dividend for 2019 to EUR4.8
per ordinary share from a previous proposal of EUR6.5 per ordinary
share, and EUR4.86 per preferred share instead of EUR6.56.
Shares were trading down 4.5% Thursday morning.
The German auto maker sounded a more optimistic note for the
second half of the year.
Through May, mainly sales in post-lockdown China had been
showing signs of recovery, while in the U.S. and Europe they
continued to decline sharply. But Volkswagen said a recovery in
demand for cars in markets from Western Europe to the U.S. helped
the group improve car deliveries to customers in June and July,
even though they remained in the red.
In June, car deliveries to customers in Western Europe were
still down 30% but that was better than the 57% drop in May,
Volkswagen said. For the month of July, the car maker now expects a
single-digit percentage drop in deliveries for Western Europe and a
continued improvement throughout the second half of the year.
The recovery is less pronounced in the U.S., also because demand
there didn't collapse as strongly as in Europe during the
shutdowns, Volkswagen sales chief Christian Dahlheim said. In June,
deliveries to customers in the U.S. were still down around 20%, he
said, compared with a drop of over 40% in April.
"Due to the positive trend exhibited in our business over the
past few weeks and the introduction of numerous attractive models,
we look cautiously optimistic to the second half of the year," Mr.
Witter said.
Daimler AG last week said it was registering signs of recovering
demand for luxury cars and electric vehicles, with China leading
the way, prompting shares to rise. The pandemic, however, also
prompted Daimler to expand cost cutting.
Overall for the year, Volkswagen said it expects full-year sales
to be significantly below last year's level and operating profit to
be severely below last year's figure but still positive.
Nick Kostov in Paris contributed to this article
Write to Ruth Bender at Ruth.Bender@wsj.com
(END) Dow Jones Newswires
July 30, 2020 17:03 ET (21:03 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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