Ford posts $1 billion profit in 3rd quarter

[Iggypoppin']

debt of that description isn't always to be considered "bad". ford did gamble with the move to mortgage all assets, but it paid off. i see no better proof than this: of the big three, which company went bankrupt? GM and chrysler. which didn't? ford. why? asset mortgaging. profitable afterward? yes. so really, when you compare ford to GM and chrysler, they're doing extremely well. looks like we all picked the right team.

and phillyc you're absolutely correct. when a company chooses to borrow that much money, they need to ensure they can pay it back, but if they can do it as quickly as ford, thats even better. if a repayment scheme of $1b/qtr on a $27b loan is achieved and maintained, then that is really promising.

[janddbone]

The report is very clear that the repayments are even less than this... Total due less than $2 billion over twelve months... So they will have some of that $1 billion profit to plow into other things as well.

[phillyc]

Originally Posted by mr_br_johnstone

The report is very clear that the repayments are even less than this... Total due less than $2 billion over twelve months... So they will have some of that $1 billion profit to plow into other things as well.

Yes, that is correct. $2B USD to be paid off in the next 12 months. That is partly because they sold (oversubscribed in fact) $10B USD worth of stock earlier this year. In the process they made a $2.3B USD book profit, as the stock sold was $7.7B USD in exchange for paying off $10B USD of debt. That move alone saved them a quote $500M USD annually.

The $1B USD qtrly profit is indeed whilst still paying interest on that $27B USD outstanding, which would be costing $1.35B USD a year ($0.34B USD qtrly), based on the above.

No, Ford won't just use the profits to pay off debt, they will use stock raisings as well.

We must not forget though that whilst all this was going on, Ford are / were still developing the next generation of vehicles, drivetrains and technologies.

Ford are continuing to invest in their future, unlike Chrysler and General Motors who have just been cutting, cutting, cutting. They might have both benefitted from going through bankruptcy in a financial sense, but GENERAL MOTORS & CHRYSLER are STILL are in a DEATH SPIRAL.

We are already starting to see the product led revolution at Ford, something that really kick started back in 2006 when Alan Mullaly took over. The next few years should really highlight this.

Just remember, one swallow does not make a summer. This great result needs to be repeated, regularly!

[Iggypoppin']

Originally Posted by phillyc

We must not forget though that whilst all this was going on, Ford are / were still developing the next generation of vehicles, drivetrains and technologies.

Ford are continuing to invest in their future, unlike Chrysler and General Motors who have just been cutting, cutting, cutting.

and this is why consumers should be switching to ford. allegience to companies such as chrysler and GM in a time when they are bankrupt, are not delving into any real future endevours and are basically just floundering is pointless. ford are forging ahead, on their own with no government(taxpayer) assisstance. they create new cutting edge vehicles and are now comparable quality-wise with toyota and honda. combine this with the fact they are chaired by alan mullaly and i see ford making a future as world #1 automaker.. we'll see i guess?

[Bossxr8]

GM will basically be going for the next few years without any new product, bar the Volt which will be a ridiculous failure being a lot more expensive than the Prius, and also due to the fact that even if it did sell well it would make very little money for GM, they have already admitted that. They wanted it solely for image reasons, not financial ones.

GM may not suffer from very little money spent on product in the next 12-24 months, it will take a few years before the full impact of this unveils when their product becomes outdated and stale.

Luckily Ford have not stopped spending on product. This will help them in not only the short term but even more so in the long term.