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Ford 2Q profit drops 86% as it restructures overseas

DEARBORN, Mich. (AP) — Ford's net profit tumbled 86% in the second quarter due largely to restructuring costs in Europe and South America. Net income for the April-through-June period dropped to $148 million, or 4 cents per share. Without the charges the company made 28 cents per share. Revenue was flat at $38.9 billion. On average, analysts surveyed by FactSet expected earnings 31 cents per share on revenue of $38.49 billion. Chief Financial Officer Tim Stone says the company had charges of $1.2 billion as it moved to close factories in Europe and South America. He says Ford already is seeing an impact from its global fitness measures that included a reduction of 7,000 white-collar workers. Ford, which released numbers after the markets closed Wednesday, says its results include a $181 million valuation loss on an investment in a software company, trimming 4 cents off adjusted earnings per share. Its stock fell 6.3% in after-hours trading to $9.68. Stone said Ford is in the early stages of its restructuring, but already is seeing improvement in some regions. Free cash flow also improved by 80% to $2.1 billion in the first half of the year, he said. "We're already starting to see some early benefits," he said. "A lot of work to do." The company expects improvement in the second half of the year as more new big SUVs hit dealerships and more of the restructuring takes hold. Ford on Wednesday forecast pretax adjusted earnings of $7 billion to $7.5 billion for all of 2019, compared with $7 billion last year. The company previously had only said that pretax earnings would improve. Full-year adjusted earnings per share are forecast to be $1.20 to $1.35, up from $1.30 in 2018. Previously it did not give per-share guidance. Ford's U.S. sales fell nearly 5% in the second quarter, according to the Edmunds.com auto pricing site, as the company exited most of its passenger car business. But Stone said sales of the new Ford Ranger small pickup offset much of that as its share of the small truck segment rose 14%. Edmunds, which provides content for The Associated Press, said Ford's average vehicle sale price rose 2.8% to $41,328 during the quarter. In North America, Ford's biggest profit center, pretax earnings fell 3% to just under $1.7 billion, which the company blamed on switching its Chicago factory to build new versions of midsize SUVs.

Lincoln poised to double MKZ Hybrid production

The Lincoln MKZ Hybrid has been something of a hit for Ford since the beginning, exceeding the company's modest projected 15-percent take rate for more than two years (we say "modest" because that still means an overwhelming majority of Lincoln customers are passing up on the gas-electric powertrain even though it costs the same as the standard model). Either way, Lincoln builds 700 MKZ Hybrids at its plant in Mexico each month, but has sold 715 of them in each of the past three months. That's why, according to a report in The Detroit News, when the restyled 2014 MKZ Hybrid arrives (non-hybrid pictured), Ford is doubling production compared to 2013. Instead of the hybrid model being 20 percent of production, the new hybrid will make up 40 percent.
Ford is doing well with hybrids in general - its portion of the electrified vehicle segment jumping 12 points in a single year to 16 percent. Assuming Ford doesn't change the pricing strategy (along with the changes Ford is making to calibration to improve fuel economy), the sedan could continue to "[show] other luxury hybrids how it's done" when it goes on sale later this year.

Junkyard Gem: 1978 Lincoln Continental Town Car

Just before Ford downsized the Continental for 1980 and made the Town Car a separate model for 1981, the biggest and plushest new sedan in the Dearborn universe was the mighty Continental Town Car. Here's one from 1978, the second-to-last model year of the two-and-a-half-ton Continental Town Car, found in nice condition in a Denver car graveyard last month. This car rolled out of the Lincoln showroom loaded, with the landau-style "Coach Roof" and just about every additional option. Base price on the 1978 Continental with the Town Car package started at $11,606 (about $48,350 in 2020 dollars), but this car cost much more than that. A new Mercedes-Benz S-Class cost better than twice as much that year (and it was worth it), but you still had to be a heavy-duty high-roller to buy a new '78 Town Car. The base engine in the 1978 Continental was a 400-cubic-inch (6.6-liter) V8 making a grim 166 horsepower, a truly horrific ratio of 25.2 horsepower per liter of displacement (torque came to a respectable 319 lb-ft, though). If the new Navigator got 25.2 horses for each liter in its turbo V6, it would have a mere 88 horsepower to haul its nearly three tons, rather than the 450 horses that 21st-century engine technology gives us. The good news with this car is that it came with the optional 460-cubic-inch (7.5-liter) V8, rated at 210 horsepower and 357 lb-ft. That was sufficient to get this car's 4,660 pounds moving well enough. Still just 28 horses per liter, but a significant upgrade. These cars weren't about performance, however. They were about a silent, cushy ride and poofy seats that swallowed you in velour comfort. When did Detroit stop making these pillow-top seats? And opera lights? And snazzy "coffin-handle" door pulls? Yes, even the wire wheels (a $333 option, or $1,385 today) stayed on this car to the very end. Why get a Rolls-Royce when you could have this, the grille of this behemoth seems to ask us. Though it remained in good condition when it arrived in its final parking space, a Malaise Era Continental sedan just isn't worth much in the enthusiast world. Even a 1978 Mark V in nice shape would be hard-pressed to find a forever home nowadays. At least it had a chance to visit the Norman Rockwell Museum in Massachusetts before the end. In what came to look like a very smart move by Ford, in light of certain geopolitical events in 1979, the Panther-based 1980 Continentals weighed nearly a half-ton less than this car.