Ford Motor Co. posted a drop in its profits during the second quarter of this year. Specifically, the company achieved a net income of $2.4 billion on revenues of $35.5 billion, excluding Volvo, during the quarter.
In the same period last year, the company recorded net profits of $2.6 billion on revenue of $35.07 billion, including Volvo. With Volvo excluded, the company’s revenue in the same quarter last year was $31.3 billion.
Ford CEO Alan Mulally stated that they had delivered “very good” results for the second quarter while growing the business worldwide and serving more customers in every region. Despite the uncertainty of the business environment, the company further strengthened its balance sheet and continued to invest for the future, Mulally added.
At the end of the quarter, the company had $22 billion of automotive gross cash, which is an increase of $700 million from March 31.
The company’s liabilities dropped $2.6 billion to $14 billion. Ford CFO Lewis Booth disclosed that the company is now at $22 billion net cash and $14 billion net debt, reflecting substantial improvement from the first quarter.
However, Booth did not state when the company would obtain an investment grade credit rating. He shared that the rating agencies have made it clear that they want the company to achieve several targets, including the resolution of contract negotiations with the UAW this summer. He added that if Ford continues to post profits and reduce debt, the company could get to investment grade sooner.