15 April 2020 by jbchevrel
Ford Motor Company (F) CDS has rebounded quite sharply from FOMC-Thursday's close at 700bp. It was back above 900bp yesterday, under-performing GM by more than 300bp on the day and today F is wider again, closed 950bp. F provided on Tuesday some preliminary Q1 numbers. F has not yet completed the close of its first-quarter 2020 books and the preliminary financial data have not been subject to review or other procedures by the company’s independent auditor. Q1 vehicle wholesales were announced down -21% oya (double supply & demand cause). F expects to report Q1 revenue of $34b and Q1 adj EBIT of -$0.6b (excl. $0.3b of special-item charges). In March, F suspended its $0.6b quarterly dividend and share buy-back scheme. CFO said the company is taking other steps to preserve cash, including by lowering OPEX, CAPEX. They are also deferring some portions of execs' salaries. As of April 9, the company had $30b of cash on its balance sheet, including $15.4b of proceeds from borrowings last month against 2 previously existing lines. CFO: “we believe we have sufficient cash today to get us through at least the end of the third quarter with no incremental vehicle production and wholesales or financing actions.” CFO said Ford Credit’s balance sheet is such that debt maturities are longer than assets’, so he argues no liquidity trouble. Liquidity remained above $25b target with $28b at EOQ1. At the moment, only F’s JVs in China are producing/selling vehicles. The company is considering a scenario for a phased restart of its manufacturing plants, supply network and other dependent functions beginning some time in Q2… F’s full announcement of Q1 results is planned for April 28. F’s 2020 guidance given on Feb 4 and then withdrawn in March sounds like a long time ago (earn. $5.6-6b) although it hadn’t overwhelmed mkt at the time.