Ford Posts Wider Loss

Elena
23 Oct, 2006
New York City

Ford reported net loss of $3.08 per share, larger than last year''s Q3 loss of $284 million, or 15 cents per share, and the largest since the fourth quarter of 1992. Ford Motor also said it will restate its earnings for 2001 due to accounting errors related to derivative deals. The restatement is expected to effect financial results from 2001 until the third quarter of 2006.

[R]8:00AM Ford reported wider Q3 loss. The automaker will restate earnings.[/R]
Ford Motor ((F)) reported Q3 wider profit loss of $5.8 billion, citing costs of a massive restructuring plan aimed at reducing its expenses. Ford's net loss of $3.08 per share was larger than last year's Q3 loss of $284 million, or 15 cents per share, and the largest since the fourth quarter of 1992 of $8.1 billion, which was due mainly to accounting changes. Ford's plan aims to slash $5 billion in costs by the end of 2008 by cutting 10,000 white-collar workers and offering buyouts to all of its 75,000 unionized employees. The automaker said special charges for the third quarter of 2006 totaled $5.26 billion before taxes. Excluding restructuring costs, the company said it lost $1.2 billion, or 62 cents per share, from continuing operations. The quarterly results came in below analysts’ expectations of a loss of 61 cents per share. The company also said it gained $99 million due to the release of a reserve from excise taxes in South America.

Ford Motor also said it will restate its earnings for 2001 due to accounting errors related to derivative deals. The restatement is expected to effect financial results from 2001 until the third quarter of 2006. It is also expected to improve results for 2002. The company is expecting to complete the restatement by the time it files its 10Q for the September quarter.


[R]7:30AM Asian markets finished mixed, with Japan up and HK and Seoul down.[/R]
Asian markets closed mixed on Monday. The Nikkei 225 Index advanced 0.82% to end at 16788.82, its highest closing since May 11. The benchmark index was boosted by auto makers and electronics companies. Shares of Sony gained 0.84%, while Canon added 1.7%. Shares of Internet and telecommunications conglomerate Softbank rose 3.5%. Lower crude prices weighed on shares of energy producers, sending Inpex Holdings 0.5% lower.

In Hong Kong, the Hang Seng Index closed flat at 18089.85. Shares of China Mobile, the top cellular company in the world by subscribers, shed 0.2%, after reaching a fresh six-year high earlier in the session.

The Korea Composite Stock Price Index ended up 0.1% at 1364.95. Construction stocks advanced after the government unveiled its plan to develop two new residential towns near Seoul, as part of a series of measures to curb surging property prices. Hyundai Engineering & Construction rose 3.1% and GS Engineering & Construction gained 2.3%.

Chinese stocks declined as investors cut holdings on concerns demand will be swamped by a sudden increase in shares, followed by IPO debut of ICBC on Friday. The Shanghai Composite Index lost 1.7% to 1759.39.

Australia S&P ASX/200 finished little changed at 5333.50, Singapore Straits Times Index ended up 0.2% at 2691.61 and Taiwan Weighted Price Index clsoed little changed. Markets in Indonesia, Malaysia, Thailand and New Zealand were closed for holidays.


[R]6:30 AM Falling oil stocks push European markets lower despite tech gains.[/R]
European markets were lower by mid morning on Monday. The FTSE 100 in London shed 0.1% to 6,150.8, while Frankfurt Xetra Dax remained marginally higher at 6,207.22 and the CAC 40 in Paris fell 0.1% to 5,372.91.

Decliners

Oil stocks were lower on Monday. Finnish refiner Neste Oil lost 3.5%, Norsk Hydro was off 2.7% and Repsol of Spain was down 1.3%.

Advancers

Airlines advanced on falling oil prices. German carrier Lufthansa gained 2%, British Airways added 2%. Akzo Nobel, the chemicals and drugs group, gained 1.1% despite a downgrade by ING.

Technology shares also gained. SAP in Germany was one of the early advancers, up 1%. Banks were led higher by Standard Chartered, after reports it was in the running to take over DBS Group of Singapore. Its shares gained 2.6%. French insurer CNP Assurances added 1.8% after its rating was raised by JPMorgan from neutral to overweight.

The steel sector remained in demand after ThyssenKrupp denied weekend press reports that it was considering a counterbid for Corus, the Anglo-Dutch group which has agreed to be purchased by Tata Steel. Shares in Corus gained 0.1% in Amsterdam, while Thyssen climbed 0.2%.

Oil and gold

Oil trade was range-bound on Monday amid market doubts about a decision by OPEC to cut production. December contracts for light sweet crude oil were up 2 cents at $59.35 a barrel on the NYME. Brent crude futures on London ICE exchange shed 1 cent to $59.67.

Gold traded in London at $588.50 per troy ounce, down from $594.30 late Friday.

Currencies

The U.S. dollar was higher against other major currencies in European trading Monday morning. The euro was quoted at $1.2561, down from $1.2620 late Friday in New York. The British pound traded at $1.8744, down from $1.8843. The dollar bought 119.19 Japanese yen, up from 118.65.