Ford posts record $8.7B loss, accelerates shift to small cars

— -- The bulk of the loss, which amounted to $3.88 a share, came from markdowns in the value of Ford's assets in light of a slumping auto market that no longer favors the large, big-profit pickups and SUVs that drove Ford's earnings for years. The loss compares with net profit of $750 million, or 31 cents a share, in the quarter a year ago.

The $8.67 billion loss was the 24th worst in U.S. history, according to Standard & Poor's.

Excluding $8 billion in special charges — including $5.3 billion for those markdowns in its troubled North American operations and $2.1 billion for Ford Credit — the automaker had a $1 billion pre-tax loss from continuing operations, amounting to 62 cents a share, worse than Wall Street expected. Twelve analysts surveyed by Thomson Financial, on average, expected a loss of 27 cents a share.

Ford's second-quarter revenue was $38.6 billion, down $5.6 billion from the year-ago period. Analysts expected $34.6 billion.

The company said it has $26.6 billion in cash. It doesn't expect to be profitable this year or through 2009. Ford went through $2.1 billion of its cash stockpile in the second quarter.

Wall Street reacted swiftly, sending Ford shares down. It closed at $5.11, down 92 cents or 15.3%.

CEO Alan Mulally said Ford's return to profitability depends on a rapid transformation to smaller vehicles and advanced, gas-saving engines. That's a big departure from the Lincoln Navigator SUVs, Ford Explorers and F-150 pickups that led the company in the past. Even sales of crossovers — SUV-like vehicles based on a car chassis that are more fuel-friendly than truck-based SUVs— have tapered off.

"We are uniquely positioned to leverage our global assets and the global strength of the Ford brand to quickly bring more small, fuel-efficient vehicles to North America," Mulally said.