Ford, Daimler and Hyundai’s profits fall; Renault up
Auto sales fell 10% in the first half
DETROIT— Ford Motor Co. posted its worst quarterly loss ever Thursday in a roiling global auto market that also saw profits fall at Daimler AG, Hyundai Motor Co. and AutoNation Inc. Renault SA reported a profit increase in the first half of the year but still plans to cut jobs and scale back production.
The rising cost of oil and raw materials and the economic slowdown in North America and Western Europe were generally to blame for the auto-makers’ woes. In the United States, auto sales dropped 10 percent in the first half of the year as consumers were stunned by high gas prices and falling home values. Sales in Europe dropped 8 percent in June and threaten to continue their slide.
AutoNation Inc., the largest U. S. auto retailer, said its second-quarter profits tumbled 33 percent to $51.8 million as sales dried up. The Fort Lauderdale, Fla.-based company announced plans to cut 1,300 jobs and sell underperforming dealerships in order to reduce costs by $100 million per year.
But by far the most stunning news came from Dearborn-based Ford, which reported an $8.67 billion loss for the second quarter, surpassing its previous record quarterly loss of $6.7 billion in the first quarter of 1992.
Ford lost $3.88 per share in the April-June quarter, compared with net profit of $750 million, or 31 cents per share, in the same quarter a year ago.
The net loss included $8.03 billion in write-downs because of the sharp decline in U. S. truck and sport utility vehicle sales, which has reduced the value of Ford’s North American plants and equipment and Ford Motor Credit Co.’s lease portfolio. Ford’s truck and SUV sales fell 18 percent in the first six months of this year.
Even excluding those items, Ford lost 62 cents per share, worse than Wall Street expected. Twelve analysts surveyed by Thomson Financial, on average, expected a 27 cent loss per share. Ford’s second-quarter revenue was $38.6 billion, down $5.6 billion from the year-ago period.
Daimler, based in Stuttgart, Germany, said its quarterly profits slipped 25 percent to $2.2 billion mainly because of its 19.1 percent share in Chrysler LLC. Chrysler, which is almost wholly dependent on the North American market, has seen sales of its truck-heavy lineup plummet 22 percent in the United States so far this year.
Hyundai said its secondquarter profit fell 11 percent to $542.1 million despite a 12.8 percent increase in revenue to $9.03 billion. The weakening Korean won was partly to blame, the Seoul, South Koreabased automaker said. Hyundai also said it was stung by the higher price of oil and raw materials and said it planned to cut costs and continue an aggressive overseas expansion plan.
Renault reported a 37 percent increase in profit to $2.2 billion for the first half, reflecting cost-cutting measures, lower warranty costs and strength in some regions, including France. Revenues increased 2.3 percent to $32.96 billion.
However, the Paris-based company also said that it is anticipating a big drop in European car sales and is talking to its unions about cutting 5,000 jobs by 2010.
