S&P cuts Ford view to negative

Standard & Poor's said it revised the outlook on Ford Motor Co., Ford Motor Credit Co. and all related entities to negative from stable, reflecting heightened concerns regarding Ford's profit potential in the wake of the company's significantly revised earnings and cash flow guidance for 2005.

At the same time, S&P affirmed its BBB- long-term and A-3 short-term ratings on the companies.

Ford has disclosed that it now expects earnings per share of only $1.25 to $1.50 (before special items) in 2005, instead of its previous guidance of $1.75 to $1.95. Management also expects Ford's automotive operations to have no better than breakeven pretax earnings this year (before special items), in contrast to the previous goal of $1.5 billion in pretax earnings. In addition, Ford has said it no longer expects to achieve its earlier goal of $7 billion pretax earnings as early as 2006.

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