Ford Extends Credit Facility - Analyst Blog


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Ford Motor Co. ( F ) has amended and extended the size and maturity of its revolving credit facility of $8.9 billion, which was scheduled to mature on November 30, 2013. The lenders have agreed to increase the size of the credit line by $400 million to $9.3 billion and maturity by 2 years to November 30, 2015.

The facility of $8.9 billion was undrawn, except $130 million that has been utilized for letters of credit. Of the extended $9.3 billion facility, $300 million are scheduled to mature on November 30, 2013.

The extension will help the company strengthen its balance sheet and obtain an investment grade rating. The facility is a part of more than $23 billion borrowed by Ford in late 2006 in order to support its revival from the global economic crisis.

Ford, a Zacks #3 Rank (Hold) company, posted a 34% fall in profit to $797 million or 20 cents per share (before special items) in the fourth quarter of 2011 from $1.20 billion or 30 cents per share (before special items) in the same quarter of 2010. With this, the automaker has missed the Zacks Consensus Estimate by 7 cents per share.

Total revenue during the quarter grew 6.5% to $34.6 billion. It was higher than the Zacks Consensus Estimate of $31.8 billion.

Ford had cash and marketable securities of $22.9 billion as of December 31, 2011, an improvement from $20.5 billion as of December 31, 2010. Total Automotive liquidity at the year-end was $32.4 billion, including all available credit lines. Total Automotive debt stood at $13.1 billion as of December 31, 2011 compared with $19.1 billion as of December 31, 2010.

For full year 2012, Ford expects industry volume (including medium and heavy trucks) of 13.5 million units-14.5 million units in the U.S. and 14.0 million units-15.0 million units in the 19 European markets covered by the automaker. The company expects its 2012 market share in U.S. and Europe to be almost at the same level as 2011. Its market share in 2011 was 16.5% in the U.S. and 8.3% in Europe.

During the year, Ford anticipates Automotive pre-tax operating profit to improve from 2011. Ford Credit is expected to be solidly profitable, although at a lower level compared with 2011. Total company pre-tax operating profit is expected to be almost flat with 2011.

Ford's cross-town rival, General Motors Company ( GM ) posted a profit of $0.7 billion or 39 cents per share in the fourth quarter of 2011, missing the Zacks Consensus Estimate by 3 cents per share. The results excluded net loss from special items of $0.2 billion or 11 cents per share. It compared with the profit of $0.9 billion or 52 cents per share in the fourth quarter of 2010.

The company's revenues in the quarter scaled up 3% to $38.0 billion, which was in line with the Zacks Consensus Estimate. Unit sales escalated 3% to 2.2 million vehicles from the fourth quarter of 2010. The automaker occupied a market share of 11.7% during the quarter, up from 11.5% in the year-ago quarter.

FORD MOTOR CO ( F ): Free Stock Analysis Report
GENERAL MOTORS ( GM ): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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