-- Automotive gross cash at March 31, 2007 was $35.2 billion, including cash and cash equivalents, net marketable securities, loaned securities and short-term Voluntary Employee Benefits Association (VEBA) assets.***
Ford's first-quarter loss from continuing operations, excluding special items, was 9 cents per share, or $171 million, compared with a profit of 12 cents per share, or $223 million, in the same period a year ago.**
Special items, which primarily reflected the impact of restructuring efforts, reduced pre-tax results by $113 million, or 6 cents per share, in the first quarter.
Ford's first-quarter revenue was $43 billion, up from $40.8 billion a year ago. The increase primarily reflected mix improvement and favorable currency exchange, partially offset by lower volume.
"We are making progress on executing the four priorities of our plan -- restructuring the company, accelerating product development, funding our plan and working effectively as one team," said President and Chief Executive Officer Alan Mulally. "I am pleased that the basics of our business are improving, but we still have a lot of work to do.
"Our first quarter results came in somewhat stronger than expected, but there are many uncertainties going forward. We remain focused on improving our quality, productivity and business performance," Mulally added.
* The financial results discussed herein are presented on a preliminary basis; final data will be included in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2007.
** Earnings per share from continuing operations, excluding special items, is calculated on a basis that includes pre-tax profit and provision for taxes and minority interest. See table following "Safe Harbor/Risk Factors" for the nature and amount of these special items and a reconciliation to U.S. Generally Accepted Accounting Principles ("GAAP").
*** See table following "Safe Harbor/Risk Factors" for a reconciliation of Automotive gross cash to GAAP.
First-quarter highlights included: -- Strong performance of new U.S. products including Ford Edge, Lincoln MKX, Ford F-Series Super Duty, Ford Escape and Mercury Mariner. -- Successful public introduction of the all-new Ford Mondeo and redesigned Ford C-MAX at the Geneva Motor Show. -- Record Premier Automotive Group profits. -- Ford Europe pre-tax profits of $219 million, an increase of $154 million compared with a year ago. -- Cost savings of $500 million, $400 million of which was associated with North America - bringing total cumulative cost savings to $1.9 billion toward the 2008 target of reducing annual operating costs by $5 billion compared with 2005. -- Reduction of 18,000 personnel positions in North America. -- Sale of one Automotive Components Holdings (ACH) business during the quarter and agreement in principle reached to sell two other ACH businesses - bringing to four the total number of ACH businesses currently subject to agreements in principle for sale. -- Agreement to sell Automobile Protection Corporation (APCO) -- finalized in April. -- Agreement to sell Aston Martin. -- Continued improvement in quality.
The following discussion of the results of our Automotive sector and Automotive segments/business units is on a basis that excludes special items. See table following "Safe Harbor/Risk Factors" for the nature and amount of these special items and any necessary reconciliations to GAAP.
On a pre-tax basis, worldwide Automotive sector losses in the first quarter were $225 million. This compares with a pre-tax loss of $203 million during the same period a year ago. The 2007 losses were more than explained by net interest expense, partially offset by automotive operating profits of $116 million during the quarter.
Worldwide Automotive revenue for the first quarter was $38.6 billion, up from $37 billion in the same period last year. The increase primarily reflected mix improvement and favorable currency exchange, partially offset by lower volume. Vehicle wholesales in the first quarter were 1,650,000, down from 1,756,000 a year ago.
Automotive gross cash, which includes cash and cash equivalents, net marketable securities, loaned securities and short-term VEBA assets, was $35.2 billion at March 31, 2007, up from $33.9 billion at the end of the fourth quarter.
Ford North America: In the first quarter, Ford's North America Automotive operations reported a pre-tax loss of $614 million, compared with a pre-tax loss of $442 million a year ago. The increase in losses primarily reflected unfavorable volume and mix, partially offset by cost reductions. Revenue was $18.2 billion, down from $19.8 billion for the same period a year ago.
Ford South America: Ford's South America Automotive operations reported a first-quarter pre-tax profit of $113 million, compared with a pre-tax profit of $137 million a year ago. The decline primarily reflected the non- recurrence of hedging gains. First quarter revenue improved to $1.3 billion from $1.2 billion in 2006.
Ford Europe: Ford Europe's first-quarter pre-tax profit was $219 million compared with a pre-tax profit of $65 million during the same period in 2006. The improvement was more than explained by favorable volume and mix, partially offset by higher incentive spending. During the first quarter of 2007, Ford Europe's revenue was $8.6 billion, compared with $6.8 billion during the first quarter of 2006.
Premier Automotive Group (PAG): PAG reported a record pre-tax profit of $402 million for the first quarter, compared with a pre-tax profit of $152 million for the same period in 2006. The improvement is more than explained by favorable volume and mix, favorable net pricing and lower costs, partially offset by adverse currency exchange. First-quarter 2007 revenue was $8.4 billion, compared with $7.1 billion a year ago.
Ford Asia Pacific and Africa: For the first quarter, Ford Asia Pacific and Africa reported a pre-tax loss of $26 million, compared with a pre-tax profit of $2 million a year ago. Adverse currency exchange and unfavorable volume and mix were partially offset by favorable cost performance. Revenue was $1.8 billion for the first quarter of 2007, compared with $1.7 billion in 2006.
Mazda: For the first quarter, Ford earned $22 million from its investment in Mazda and associated operations, compared with $45 million during the same period a year ago. The decline is largely explained by the non-recurrence of gains on an investment in Mazda convertible bonds.
Other Automotive: First-quarter results included a pre-tax loss of $341 million, compared with a loss of $162 million a year ago. The year-over-year decline is largely explained by higher interest expense and related costs associated with the debt increase in the fourth quarter of 2006. This was partially offset by increased interest income on a larger cash portfolio.
FINANCIAL SERVICES SECTOR
For the first quarter, Financial Services sector earned a pre-tax profit of $294 million, compared with a pre-tax profit of $375 million a year ago.
Ford Motor Credit Company: Ford Motor Credit reported net income of $193 million in the first quarter of 2007, down $55 million from earnings of $248 million a year earlier. On a pre-tax basis from continuing operations, Ford Motor Credit earned $294 million in the first quarter, compared with $382 million in the previous year. The decrease in earnings was more than explained by higher borrowing costs and higher depreciation expense for leased vehicles. The non-recurrence of losses related to market valuation adjustments from non-designated derivatives was a partial offset.