Cost Cuts Help Ford Narrow Third-Quarter Loss

Aggressive cost cutting and strong results from its financial services business helped Ford Motor Co. narrow its loss sharply in the third quarter, but intense pricing pressure left it with red ink in its automotive operations.

The world’s No. 2 automaker said Thursday that it lost $25 million, or 1 cent a share, in the July-September quarter, compared with a loss of $326 million, or 18 cents, a year before.

Ford also revised upward its full-year earnings forecast from 70 cents a share to a range of 95 cents to $1.05 a share.

In addition to a strong performance at Ford Motor Credit Co., the parent company said intense cost cutting helped improve its bottom line. But Ford had another large loss in worldwide automotive operations and swung to a loss in its North American auto business.

Ford began the year with a target of trimming expenses by $500 million. As the company tries to keep a global restructuring on track, the new goal is at least $3 billion.

Trying to rebound from $6.4 billion in losses in 2001 and 2002, Ford has announced cuts of more than 7,700 jobs worldwide in recent weeks.

“Although we continue our intense focus on cost reductions, we don’t believe these levels of year-over-year reductions are repeatable on a going basis,” Ford Chief Financial Officer Don Leclair said in a conference call.

“Our future success in cost reductions will depend increasingly on reducing material and component costs associated with our new products.”

Excluding charges, Ford’s third-quarter earnings amounted to 15 cents a share. The consensus estimate on Wall Street was for a loss of 11 cents a share excluding one-time items, according to analysts surveyed by Thomson First Call.

Third-quarter revenue declined to $36.9 billion from $39.3 billion, primarily reflecting lower vehicle sales.

In North America, Ford’s automotive operations lost $116 million, in contrast to a $591-million profit in the year-ago period. The automaker attributed the most recent result to a reduction in dealer inventories related to the changeover of its F-150 pickup and two minivan models.

Through September, Ford’s U.S. vehicle sales were off nearly 5% from the first nine months of 2002.

In trading on the New York Stock Exchange, Ford shares closed up 20 cents at $12.34.