NEW YORK (CNNfn) - Ford Motor Co. reported a big second-quarter loss Wednesday, hurt by cost of replacing 13 million Firestone tires, but the loss at the world's second-largest automaker came in narrower than Wall Street forecasts.|
The automaker also affirmed its outlook for full-year earnings is at or above current forecasts, although they will be well below last year's results.
Excluding charges related to its Mazda Motor affiliate and accounting changes, Ford said it lost $551 million, or 30 cents a share, in the quarter, as it was hurt by nearly $2.1 billion, or about $1.15 a share, in costs for the tire replacement program. Ford said nearly all of those costs were reflected in its results. Wall Street analysts had forecast a loss of 34 cents a share, excluding one-time items.
The company earned a profit of $2.53 billion, or $1.18 a share, a year earlier on the same basis.
The company said it expects earnings per share for the year to be $1.25 to $1.35, in line with its previous guidance. First Call's forecast stands at $1.25 for the year. The company earned $3.22 a share last year.
Shares of Ford (F: down $0.25 to $25.47, Research, Estimates) edged lower in morning trading.
The results came a day after Ford's major competitor, General Motors Corp. (GM: down $0.91 to $65.08, Research, Estimates) reported a large drop in second quarter earnings Tuesday that beat forecasts.
Ford announced the tire replacement program in May, saying testing and data analysis suggested that Firestone Wilderness AT tires used on many of its most popular vehicles are more subject to failure than competitors' tires.
"Although we're disappointed it resulted in a second quarter loss, it was the right thing to do for the safety and trust of our customers," Jac Nasser, Ford's CEO, said in a statement.
Tiremaker Bridgestone/Firestone Inc. has criticized the recall, charging that Ford is trying to distract attention from safety problems with the design of the Ford Explorer, the nations' best-selling sport/utility vehicle.
Sales fell 5 percent to $42.3 billion from $44.5 billion. The number of vehicles sold worldwide fell to 1.86 million from just under 2 million a year earlier.
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Dearborn, Mich.-based Ford said that including all special items it lost $752 million, or 41 cents a diluted share, in the quarter. The company posted a net loss of $577 million, or 47 cents a share, in the year ago period due to losses associated with the spin-off of Visteon Corp. (VC: Research, Estimates).
A share exchange program increased the company's shares outstanding from year ago levels, leading to the lower loss per share in the period despite the increase in losses.