The second quarter came to a close in June and companies are beginning to release financial results. Chrysler CEO Sergio Marchionne indicated yesterday that the company posted a second quarter operating profit, and Ford just disclosed its full second quarter financial summary today, revealing that the automaker posted a $2.6 billion profit.
Restructuring efforts under Ford president and CEO Alan Mulally helped keep Ford from taking federal bailout money last year. Ford has shown financial progress since the restructuring and continues to do so by posting its fourth straight pre-tax profitable quarter.
"We delivered a very strong second quarter and first half of 2010 and are ahead of where we thought we would be despite the still-changing business conditions," Mulally said. "We remain on track to deliver solid profits and positive automotive operating-related cash flow for 2010 and we expect even better financial results in 2011."
Ford's total revenue for the second quarter of 2010 was $31.3 billion, an improvement of $4.5 billion over the second quarter of 2009. More revealing than total revenue, however, is its automotive operations profit of $2.1 billion pre-tax profit this year, a massive improvement over last year's $1.2 billion second quarter loss. After payments and taxes, Ford posted a total net profit of $2.6 billion -- a $338 million year-over-year improvement.
At the end of the second quarter this year, Ford has posted a total profit of almost $4.7 billion. This profit left Ford with total cash reserves of $21.9 billion, down from $25.3 billion after the first quarter due to paying off a substantial amount of debt. Over the course of the second quarter, Ford reduced its total debt by over $7 billion bringing the total down to $27.3 billion. Ford reduced its debt by paying off $3 billion of a $6.7 billion credit note, along with $4 billion worth of debt owed to the UAW. According to Ford, these debt reductions will save the company in excess of $470 million in interest payments per year.
Ford's business is improving, but it's still competing at a significant disadvantage to both Chrysler and General Motors, which thanks to federal bailouts last year, have virtually no debt. With Ford's continued growth and an even better outlook for 2011, the company aims to continue paying off its debt early, further improving the company's financial situation.