Ford beating GM in race to Europe turnaround
January 28, 2013
Ford Motor Co. will post fourth-quarter results on Tuesday with the figures likely to show the lowest operating profit of the year. But those figures mask optimism coming from an unlikely place: Europe.
Using its turnaround in the United States as a road map, Ford is moving more briskly to recover in Europe than its competitors. While Ford will report a loss of more than $1.5 billion for the full year in Europe and has forecast a similar result for 2013, Chief Financial Officer Bob Shanks said in an interview this month during the Detroit auto show, those losses will begin to disappear in about two years.
Ford will be about a year ahead of General Motors Co. in efforts to revamp operations in the region, said Peter Nesvold, a Jefferies Group Inc. analyst. The carmaker's board has signaled increased conviction in the company's European restructuring plan by doubling the quarterly dividend earlier this month, he said.
Ford's fourth-quarter revenue probably slipped 4.4 percent to $33.1 billion, the average of 11 estimates compiled by Bloomberg, from $34.6 billion a year earlier. The average of 19 estimates is for 26 cents of operating profit per share, up from 20 cents a year earlier.
The automaker aims to increase its product offerings in the region by introducing its Mustang sports car in Europe soon and is tripling its SUV offerings in the continent, Mulally said in September. The automaker is also adding the subcompact EcoSport SUV, just 4000mm (157 inches) long, and the Edge midsized utility to its European lineup, which already includes the Kuga compact, known in the United States as the Escape.
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