Chin Up in the Downswing: Ford Losses Not as Bad as Expected; Amazon, Microsoft and Netflix Show the Resilience of Tech and Online Companies
by Anne Szustek
Business news to feel good about this Friday: Ford is poised on the road to recovery. Meanwhile, Amazon and Microsoft post encouraging earnings and Netflix smashes analyst estimates.
One bright spot in the Big Three auto crisis: Ford posted lower losses than expected during the first three months of this year. The auto manufacturer reported that excluding one-time items, first-quarter 2009 losses were $1.8 billion, or $0.75 per share, compared to the average projection of losses per share of $1.23, according to analysts polled by Thomson Reuters. Ford CEO Alan Mullally said in a statement quoted by The Wall Street Journal, “I remain encouraged by the progress Ford is making to allow us to operate through the downturn and emerge as a lean, globally integrated auto maker poised for profitable growth when the economy rebounds.” Ford, the only of the Big Three Detroit automakers not to take U.S. government loans, has $21.3 billion in cash on hand; Ford CFO Lewis Booth says this is enough for the rest of the year.
Amazon.com posted an 18 percent year-on-year increase in sales to $4.89 billion during the first three months of this year. Profit at the online retailer went up 24 percent y-o-y to $177 million, working out to $0.41 per share. Software company Microsoft, which for the first time since the company went public in 1986 saw a decline in quarterly revenue, still managed to hit analysts’ earning estimates of $0.39 per share. AT&T, eBay and Apple also beat analyst estimates for this past quarter, suggesting communications, personal tech and online retailers have been weathering this recession well.
Another testament to the value of easy company-to-customer distribution: Netflix, the online-to-door DVD rental service, posted a 20 percent y-o-y increase in quarterly revenue during the first three months of this year. Earnings per diluted share were $0.40, beating analysts’ estimates of $0.31 per share. And in the biggest example of how at-home entertainment can survive, or even grow during recessions, Netflix posted year-on-year net income growth of some 70 percent during first quarter 2009.