Ford Motor Co. said on Monday it expects to post a pretax loss of about $600 million for the first quarter as the coronavirus pandemic pummeled its operations, resulting in a 21 percent drop in vehicle sales to dealers versus the same quarter in 2019.
The automaker said it also is considering additional financing actions.
Only Ford’s joint ventures in China, where the coronavirus pandemic has been receding, are currently producing vehicles. The automaker said it is working on a scenario for a phased restart of its manufacturing plants beginning in the second quarter.
"However, we believe we have sufficient cash today to get us through at least the end of the third quarter with no incremental vehicle production and wholesales or financing actions," CFO Tim Stone said in a statement.
As of April 9, Ford said it had about $30 billion in cash on its balance sheet, including $15.4 billion it borrowed last month against two existing credit lines.
The automaker may stockpile even more to help weather months of uncertainty over when it can resume manufacturing and selling vehicles. It already has suspended its dividend.
“We continue to opportunistically assess all funding options to further strengthen our balance sheet and increase liquidity to optimize our financial flexibility,” Stone said in the statement. “We also are identifying additional operating actions to enhance our cash position.”
Shares of Ford closed Monday's trading down 3.9 percent to $5.16.
Ford said any decisions on restarting its plants will be made "in cooperation with local unions, suppliers, dealers and other stakeholders."
In March, the company shuttered plants in North America and Europe due to the spreading pandemic.
Earlier this month Ford said its first-quarter U.S. sales had fallen 12 percent during the quarter. The U.S. market with its highly profitable pickup truck and SUV segments generates the overwhelming majority of Ford's profits.
Ford's U.S. sales chief Mark LaNeve said on April 2 that Ford believes some level of government stimulus will be needed for American consumers once the COVID-19 pandemic recedes.
Asked whether Ford would apply for loans from the U.S. government or the Federal Reserve to sustain its operations for longer if needed, a spokesman for the automaker said that unlike during the Great Recession -- when financing dried up -- there is still plenty of liquidity in the capital markets.
"We have a broad range of options" for obtaining additional financing if needed, the spokesman said.
It said it expects its first-quarter adjusted loss before interest and taxes to be about $600 million, compared with a profit of $2.4 billion a year earlier.
The company said it expects to report revenue of about $34 billion for the quarter.
Bloomberg contributed to this report.
