Earnings roundup: Ford turns a profit
Of all the times for Ford Motor Co. to make money, it had to pick the second quarter.
Just as the company goes hat-in-hand to the United Auto Workers seeking concessions, it shocks Wall Street and turns a tidy $750 million profit, its first in two years.
It may be a little harder now for the nation’s No. 2 automaker to plead poverty to its roughly 51,000 UAW workers, but Chief Executive Alan Mulally cautioned Thursday that Ford has not turned the corner to sustained profitability.
“These accomplishments are something to be proud of, but we are not ready to declare victory,” he said, predicting substantial losses in the second half due to traditionally lower sales volume. He repeated the company’s assertion that it won’t make a full-year profit until 2009.
He also said the union, which formally opened contract talks with Ford on Monday, knows the company’s financial situation well.
Analysts and even Wall Street investors greeted the black ink favorably. Ford’s stock price rose on a day when most others’ nosedived.
The company said its profit was fueled by cost cutting, higher net pricing on its vehicles, slimmer losses in North America and better sales overseas.
It also said sale of its Jaguar and Land Rover subsidiaries was probable, it was doing a “strategic review” of its Volvo unit, and its U.S. market share was starting to stabilize, even rising from the first quarter to second quarter.
Ford’s profit of 31 cents per share compares to a net loss of $317 million, or 17 cents per share, in the same quarter of last year.
Even its struggling North American division showed progress, cutting its losses from $789 million in the second quarter of last year.
“3M has spread its bets on everything from pipe coatings to Scotch tape, and it gets more revenue from overseas than from within the U.S. Its results on Thursday showed how that diversity is paying off.
3M Co. said its earnings rose 3.9 percent to $917 million from a year ago, and it raised its guidance for the full year. 3M shares — a Dow component — rose 43 cents to $90.05 on a day when the rest of the market was down sharply.
3M said it earned $1.25 per share during the quarter that ended June 30, up from $882 million, or $1.15 a share during the same period last year. Revenue rose to $6.14 billion, up 7.9 percent from $5.69 billion a year ago.
“Blockbuster Inc. said Thursday it swung to a second-quarter loss as the video rental company spent heavily on its online business to compete with rival Netflix Inc. Its shares fell more than 3 percent.
The company reported a loss after paying dividends on preferred shares of $38.1 million, or 20 cents per share, for the three months ended July 1 compared with a profit of $65.6 million, or 31 cents per share, a year ago.
Blockbuster’s loss from continuing operations was $34.2 million, or 19 cents per share, compared with $65.1 million, or 30 cents per share last year. The loss in the latest quarter would have been wider except for a gain of $77.7 million, or 41 cents per share, from the sale of 217 United Kingdom-based Gamestation stores. Year-ago results benefited from $91.2 million, or 42 cents per share, in favorable tax audit settlements.
“Wendy’s International Inc. swung back to a profit in the second quarter, recovering from a year-ago loss that was the result of writing down the value of its struggling Baja Fresh Mexican Grill chain and cutting 355 corporate office jobs.
The third-largest hamburger chain, which said in April that it is exploring a possible sale of the company, said Thursday that it earned $29.2 million, or 33 cents per share, for the three months ended June 30. It lost $29.1 million, or 25 cents per share, a year ago.
Revenue was flat at $633 million compared with $634 million from continuing operations a year ago. Including the Tim Hortons coffee-and-doughnut chain that Wendy’s spun off last fall, sales a year ago were $1 billion.
Analysts surveyed by Thomson Financial expected earnings of 33 cents per share on revenue of $632 million.
“Dow Chemical Co. reported a 2 percent increase in profit for the second quarter as strong international growth offset weaknesses in the North American housing and automotive sectors and the effect of rising petroleum prices.
Shares fell $2.22, or 4.9 percent, to close at $43.45 as Wall Street suffered its one of its worst plunges of the year.
Net income climbed to $1.04 billion, or $1.07 per share, for the three months ended June 30 from $1.02 billion, or $1.05 per share, a year ago.
Revenue jumped 6 percent to $13.27 billion from $12.51 billion in the year-ago quarter.