Ford’s Financial Fine-Tuning Leads to $692 Million Loss in 3rd Quarter

Ford Motor Co. had a third-quarter loss of $692 million because the second-largest auto maker cut production and offered zero-percent financing to draw car buyers into showrooms.

The loss of 38 cents a share, which compared with year-earlier net income of $888 million, or 53 cents, includes the cost of Ford’s plan to sell its company-owned dealerships. Sales declined 9% to $36.55 billion.

Chief Executive Jacques Nasser, who already is eliminating as many as 5,000 salaried jobs by year-end, said he will make more moves to reorganize in December. Ford cut North American production 23% from the year-earlier quarter as a slower economy hurt demand and tighter U.S. border security disrupted supplies. Marketing expenses rose after Ford matched no-interest loans offered by rival General Motors Corp.

The Dearborn, Mich.-based company’s shares, which slipped 55 cents to close at $17.13 on the New York Stock Exchange, have fallen 27% this year.

Excluding one-time items, Ford had a loss from operations of $502 million, or 28 cents a share, matching the average analyst forecast in a Thomson Financial/First Call survey.

The company’s U.S. vehicle sales fell 11% through September, twice the industrywide decline. Its revenue declined from $40.06 billion in the year-earlier quarter. North American auto making operations had a third-quarter loss of $849 million, compared with year-earlier profit of $782 million.

Ford’s fourth-quarter results will improve from the third quarter but “it will be difficult to earn a profit during the quarter,” Chief Financial Officer Martin Inglis said on a conference call. The First Call average forecast that Ford will earn 6 cents a share is too high, he said.

At a Glance

Other earnings, excluding one-time gains or charges unless noted:

* Enron Corp., the largest energy trader, posted a $618-million loss in the third quarter after losing $1.01 billion on failed investments in water, telecommunications and retail energy sales.

The final loss was 84 cents a share after payment of preferred dividends, the Houston-based company said.

Net income in the year-earlier period was $292 million, or 34 cents. Revenue rose 59% to $47.6 billion.

Excluding the charges, Enron said it would have earned $393 million, or 43 cents a share, which matched the average estimate of analysts. Enron said it still expects to earn 45 cents a share in the fourth quarter.

* Defense contractor General Dynamics Corp. said third-quarter operating profit was $230 million, or $1.13 a share, up 13% from $204 million, or $1.02 a share, a year earlier.

Sales rose 22% to $3.02 billion.

But the company warned analysts not to boost their full-year earnings estimates beyond $4.50 a share.

* Linens ‘n Things Inc., the home-accessories and housewares retailer, said third-quarter profit fell 20%, and fourth-quarter earnings will be at the lower end of analysts’ estimates. Net income fell to $14.7 million, or 36 cents a share, from $18.4 million, or 45 cents, a year earlier. The company was expected to earn 37 cents. Sales 14% to $468.9 million.

* Office Depot Inc. said third-quarter profit rose 23% to $62.5 million, or 20 cents a share, from $50.6 million, or 16 cents, a year earlier. Office Depot said fourth-quarter profit may be 3 cents to 5 cents a share below the 20-cent average estimate of analysts.

* Drug giant Pfizer Inc. achieved double-digit earnings and revenue growth during the quarter, driven by strong sales of cholesterol treatment Lipitor.

Pfizer’s operating profit jumped 28% to $2.19 billion, or 34 cents a share, a penny better than expected. Those figures exclude one-time costs, including those from Pfizer’s acquisition of Warner Lambert.

Sales rose 10% to $7.90 billion.

* Philip Morris Cos., the biggest tobacco company, said third-quarter profit rose slightly as sales of premium brands such as Marlboro increased in the U.S. while declining currencies hurt results abroad.

Net income rose to $2.33 billion, or $1.06 a share, from $2.32 billion, or $1.03, a year earlier. Sales climbed 12% to $22.4 billion. The company said it will meet its previous full-year profit growth forecast of 9%.

Separately, the company said Chief Executive Geoffrey Bible plans to retire in 10 months at age 65. Under Bible, Philip Morris’s five-year average annual profit growth is 9.3%, helped by sales of the No. 1 Marlboro brand cigarettes and the company’s Miller Brewing and Kraft Foods Inc. businesses.

* Raytheon Co., maker of the Tomahawk missile used by U.S. forces in the attack on Afghanistan, posted a net loss after charges, as weakness in its commercial aerospace operations offset gains from military businesses.

Raytheon reported a net loss of $285 million, or 79 cents per share, compared with a profit of $105 million, or 31 cents, a year ago.

Those results include charges announced Wednesday from the company’s Raytheon Aircraft unit, hurt by the Sept. 11 attacks’ effect on the commercial air transport industry. Even excluding special items, operating earnings fell 10%, missing Wall Street’s targets. Revenue fell 7% to $3.9 billion.

* TRW Inc., the largest U.S. maker of air bags, said third-quarter operating profit fell to $75 million, or 59 cents a share, compared with $91 million, or 73 cents, a year ago.

Sales fell 5% to $3.9 billion.

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