Ford Motor Co. posted its first annual profit since 2005 on Thursday and expressed optimism for the future despite a turbulent year that led to the bankruptcies of its Detroit rivals.
“It really is pivotal and historic that during the worst economic recession in 30 years — due to the strength of our plan — we were able not only to survive but to deliver profitable growth,” Ford chief executive Alan Mulally said in a conference call discussing the results.
“While the business environment will remain difficult for the full year 2010, we plan to be profitable on a pretax basis excluding special items.”
Mulally said Ford also expects to be profitable in 2011.
The company reported net earnings of 868 million dollars in the fourth quarter, enabling the second largest US automaker to show a 2.7-billion-dollar profit for all of 2009.
The results represent a stunning comeback for Ford after years of painful restructuring and bleeding balance sheets.
The fourth quarter profit marked a sharp rebound from a loss of 5.98 billion dollars in the same period a year earlier, and the full-year result was a swing to profit from a loss of a whopping 14.76 billion dollars in 2008.
Ford’s fourth quarter revenue was 35.4 billion, up 22 percent from a year ago. Revenue for the full year was 118.3 billion, a decline of 19.8 billion dollars from 2008.
The latest earnings for the quarter amounted to 25 cents a share, just below analyst expectations of 26 cents. Revenues, however, were better than expected.
“Ford’s overall results are just terrific,” Rebecca Lindland, an analyst with IHS Global Insight, told AFP.
“They have a tremendous amount of momentum at just the right time — the market in the US is starting to come back slowly and Ford is able to catch the wave early.”
But JP Morgan’s Himanshu Patel cautioned that the fourth quarter profits were driven by “volatile financial services profits” rather than the core automotive business.
He wrote in a research note that market expectations “may have caught up to F’s current cost structure, and upside potential in future quarters will largely be driven by” industry sales increases, he wrote in a research note.
Mulally said he hopes Ford will be able to grow its market share by taking advantage of trouble at rival Toyota, which has suspended sales of some of its most popular vehicles after a massive safety recall due to problematic accelerator pedals.
“With the void now for people needing vehicle I’m sure there’s going to be more interest in Ford,” Mulally said as he praised the automaker’s lineup.
But Ford was forced to halt production of light buses in China because they used pedals made by the same supplier as Toyota.
Ford, which imposed hefty cuts on employees during its massive restructuring, said the latest results would allow it to pay profit sharing to 43,000 US hourly employees under a 2007 agreement with the United Auto Workers union.
The average amount is expected to be approximately 450 dollars per eligible employee.
Ford also noted it would not provide executive performance bonuses, as previously announced, but that US salaried employees will receive merit increases this year.
The automaker’s North America operations posted an operating profit of 707 million dollars, its second straight profitable quarter for the important home market. Ford was also profitable in South America, Europe and its Asia Pacific Africa divisions.
The only loss-making division was Volvo, which had an operating deficit of 32 million dollars as Ford prepared to sell the Swedish unit to Chinese automaker Geely.
Ford said it expected a modest recovery in the global automotive market, which was hit hard by recession. It projected US industry sales in the range of 11.5 to 12.5 million units, including medium and heavy trucks.
For the 19 markets Ford tracks in Europe, the company expects full year industry sales will be in the range of 13.5 to 14.5 million units.
