Ford posts $1.6B quarterly profit, predicts wider losses in Europe

[nruggiero]

Ford posts $1.6B quarterly profit, predicts wider losses in Europe
Automotive News
January 29, 2013
by Bradford Wernle

DETROIT -- Ford Motor Co. posted fourth-quarter net income of $1.6 billion, carrying the company to its fourth straight full-year profit.

Excluding a large year-earlier extraordinary gain, net in the latest quarter rose 55 percent, powered by strong results in North America. European pretax losses of $732 million dragged down quarterly profits.

Ford said that it will incur higher costs in Europe due to restructuring actions and investments in new vehicles there. It predicted a European loss in 2013 of about $2 billion, vs. an earlier forecast of a loss roughly equal to 2012's, which came in at $1.75 billion.

Overall revenues in the latest quarter rose 5 percent to $36.5 billion. Pretax profits, excluding the year-earlier special gains, rose 52 percent to $1.68 billion.

For the full year, net fell 72 percent to $5.67 billion. But it fell just 5 percent if the extraordinary gain of the fourth quarter of 2011 was excluded. Annual revenues slipped 1 percent to $134.3 billion. Pretax profits fell 9 percent to $7.97 billion.

"The Ford team delivered strong results once again, underscoring that our One Ford plan is working," CEO Alan Mulally said in a statement. "We are well positioned for another strong year in 2013."

Including the extraordinary accounting gain in the year-earlier quarter, net earnings in the fourth quarter tumbled 88 percent.

Ford expects overall profits to be about the same in 2013 as 2012, CFO Bob Shanks told reporters today.

"We expect to see higher profits from North America and expect South America and Asia Pacific to break even," he said. "We're expecting a higher industry in the U.S. and China and a lower industry in Europe" in unit sales.

Full article at link.

[jpd80]

Ford Posts Highest Fourth Quarter Pre-Tax Profit in More Than a Decade;
Full Year Pre-Tax Profit of $8 Billion and Net Income of $5.7 Billion.

LINK

Download Slides (PDF)

• Strong full year pre-tax profit was $8 billion, or $1.41 per share, a decrease of $797 million from a year ago

• Full year net income was $5.7 billion, or $1.42 per share; excluding impact of 2011 changes in valuation allowance against deferred tax assets, full year 2012 net income was $307 million lower than 2011

• Positive Automotive operating-related cash flow was $3.4 billion for the full year and $1 billion for the fourth quarter — the 11th consecutive quarter of positive performance. Ford ended 2012 with Automotive gross cash of $24.3 billion, exceeding debt by $10 billion, and a strong liquidity position of $34.5 billion, an increase of $2.1 billion over 2011

• Ford had its highest fourth quarter pre-tax profit in more than a decade — when trucks and SUVs were a more significant portion of the U.S. product mix — at $1.7 billion, or $0.31 per share, an increase of $577 million from fourth quarter 2011. Ford has now posted a pre-tax operating profit for 14 consecutive quarters

• Total company fourth quarter net income was $1.6 billion, or $0.40 per share; excluding impact of 2011 changes in valuation allowance against deferred tax assets, fourth quarter net income was $565 million higher than 2011

• Total Automotive full-year pre-tax profit of $6.3 billion was driven by Ford North America results, which set fourth quarter and full year records for pre-tax profit and operating margin since Ford began reflecting the region as a separate business unit in 2000. For the full year, Ford North America's pre-tax profit was $8.3 billion with an operating margin of 10.4 percent

• Ford Credit reported continued solid performance with a full year pre-tax profit of $1.7 billion

• For 2013 outlook, Ford expects another strong year, with Total Company operating profit to be about equal to 2012, Automotive operating margin to be about equal to or lower than 2012, and Automotive operating-related cash flow to be higher than 2012

World wide pensions are underfunded by $18.7 billion (slide 26)


The losses predicted for Europe in the next two years also include restructuring costs to fix the problem.

[Member17739]

Not bad considering the situation in Europe.

[rjc333]

Congrats to Ford!

Let's hope that the mess in Europe can be cleaned up before the next decade. Something definitely has to give.

[jpd80]

Pension plan funding is still a big problem, Ford will be sinking $5 billion into it this year as defined benefits sink due to lower interest rates.

Ford can take heart from 10.4% return in North America, now if only they could get that Ford Europe to stop losing money..

[AMERICA 123]

Ah South America ain't flying right - and Asia Pacific Africa is a huge disappointment.

Let's recap it short and sweet.

1. ) Ford sells 132,xxx more units and manages to break over 1 M for the first time - and with a much better - and stronger product mix.

2. ) Revenue bumps up as expected, a nice fat 1.6 Billion.


3. ) Oops, after all that, pretax results 'improve' by a miniscule 15 Million - and net a loss of 77 Million.

4. ) Operating margin improves..... by a paltry .3 % and still remains negative going from a reported ( -1.1 % ) to a ( - .8 % ).


At this rate, 'evidently' they need another 5.13 B in revenue - or 3.2 times 2012s improvement - to get to break even.



North America is the only source of real joy.

[Orbit Orange]

Does any maker make any money in Europe?

Or is it just a perpetual money hole that automakers flush cash down?

[EcoBustier69]

A few concerns, keep this from being an outstanding quarter/year:
A) EPA MPG fiasco which isn't Ford's fault but they are now a focal point along with hyunkia. C-Max lost sales.
B) Recent launch woes with Ecoboost 1.6L (Fusion, Escape). A lot of lost sales here.
C) Continuied nagging by CR/etc on MyFord Touch.
D) Deteriation of Europe auto market. Good news is that they are biting the bullet early with restructuring so, they can return to profit before others such as Fiat, PSA, Opel/Vauxhall. 2013 will be the worst of it.
E) Pension underfunding. As long as inflation is low, this will be a problem. Once it kicks in the pension funding will go down dramatically. Also restructuring in Europe will take some long term pressures off Ford's pension funding.
F) Deteriorating Market Down Under.

With all of those headwinds, $8/5.7 Billion is quite a nice profit.

[Extreme4x4]

Nope.

Circling the drain, as they say.

[AMERICA 123]

- no......... more like teetering on the edge of a precipice.

Worth remembering, their guidance started out with Europe @ - 600 Million and after what, four revisions the last of which was in October 2012 ? , they STILL end up down some more @ - 1.75 B.

The other regions missed as well.

The new guidance is decidedly flat in the good parts and worse than expected in the bad.

[Extreme4x4]

Could that have anything to do with the fact that the fall of Europe happened faster than anyone could have predicted??

Nahhh.

So, 123, what is your BK prediction for Ford now?? Or, based on your posting history, the merger between them and Toyota??

[Ed753]

Could that have anything to do with the fact that the fall of Europe happened faster than anyone could have predicted??

Nahhh.

So, 123, what is your BK prediction for Ford now?? Or, based on your posting history, the merger between them and Toyota??

Wait-a-minute............. You mean Ford is still in business!?

[Butz]

Good news! If Ford can do it so can GM and Chrysler

[Extreme4x4]

Wait-a-minute............. You mean Ford is still in business!?

Well, considering many predicted they would go bankrupt within 6 months of GM and Chrysler, it is pretty amazing that they are still in business. Dam lucky if you ask me.

[AMERICA 123]

- don't want anyone to feel discriminated against - or left out so just in case -