NEW YORK – Ford Motor Co. (F), the world's No. 3 auto maker, on Friday raised its third-quarter and full-year earnings guidance for 2004 because of strength in its financial services business and cost improvements in its car operations.
Ford added it expects third-quarter earnings of 10 cents to 15 cents per share, up from a prior estimate of break-even to 5 cents per share. For the full year, it expects to earn $1.90 to $2 per share, up from a previous estimate of $1.80 to $1.90.
The quarterly and annual estimates exclude any costs from the Jaguar actions and other special items.
The announcement came on the same day it announced about 1,150 job cuts in England as part of an effort to streamline its Jaguar unit.
Wall Street analysts, on average, have been expecting earnings of 9 cents per share in the third quarter and $1.99 for the full year, according to Reuters Estimates.
Ford said the improvement primarily reflects continued strong performance in its financial services business and lower costs in the automotive sector, partially offset by lower production at Jaguar.
In addition to ending final assembly operations at its Browns Lane plant in Coventry, England, by the end of 2005, Ford said it would get out of Formula One (search) racing.
The Jaguar pullback is another blow to Britain's once-illustrious automotive industry. Ford bought Jaguar, known for its leaping cat hood ornament, in 1989. The U.S. automaker resurrected Jaguar, for which Ford President Nick Scheele was honored with a knighthood.
But in recent years, Jaguar has faltered due to a lack of diesel engines for Europe, and lackluster sales of its entry-level X-Type sedan.
"It (the actions) will not fix Jaguar immediately but we do expect a sequential improvement in Jaguar results," Ford Chief Financial Officer Don Leclair said on the conference call.
However, he said that Ford's vehicle luxury brands of Jaguar, Volvo, Land Rover and Aston Martin should approach break-even levels in the fourth quarter, excluding the special items.
The job cuts and Formula One decision together are expected to result in a pretax charge of $450 million. Ford said $375 million of the charge will be booked this year and the balance will be taken next year.
Together with previously announced 2004 special items, these actions are expected to reduce full-year 2004 net earnings by about 25 cents per share, Ford said.
Ford shares closed Thursday at $13.95 on the New York Stock Exchange (search). In light premarketing trading on the Inet electronic brokerage network, the stock was up 2.7 percent at $14.32.
Reuters and the Associated Press contributed to this report.