DETROIT: Ford Motor, the second-largest US automaker, reported fourth-quarter profit that exceeded estimates as demand for its F-Series pickups drove record results for its operations in North America.
Ford reported net income of $1.6 billion, or 40 cents a share. Excluding one-time items, the per-share profit was 31 cents, exceeding the 25-cent average estimate of 19 analysts surveyed by Bloomberg. The result compared with net income of $13.6 billion, or $3.40 a share, a year earlier, when a tax gain boosted fourth-quarter earnings. Ford said European losses were wider than forecast and the 2013 deficit would be worse.
Chief Executive Officer Alan Mulally is using Ford’s turnaround in the US to guide efforts to recover in Europe more quickly than competitors including General Motors Co. (GM) Rising demand for F-Series trucks in Ford’s home market paced a record $8.34 billion annual pretax profit for the company’s operations in North America, which countered overseas losses. Ford US hourly workers will receive profit-sharing bonuses.
“I’m still bullish on Ford,” said Gary Bradshaw, a fund manager for Dallas-based Hodges Capital Management, which sold about half of its shares before they started to rally in late October. “I’m going to hang on and hope it comes back to $18 a share.” Ford closed at $13.78 yesterday in New York.
Ford reported net income of $5.67 billion for the full year. The profit in 2012 boosts the company’s earnings to $35.2 billion the past four years after losing $30.1 billion from 2006 through 2008.
Ford is expecting total company profit to be about the same in 2013 as a year earlier, with a higher profit for North America and an operating margin of about 10 per cent in the region, Chief Financial Officer Bob Shanks told reporters today after earnings were released. “The consistent performance in North America will continue into 2013,” he said.
The automaker will be about a year ahead of GM in efforts to revamp operations in Europe, Peter Nesvold, a Jefferies Group Inc. analyst with a buy rating on the shares, said before results were released. Losses will begin to disappear in about two years, Shanks said in an interview this month during the Detroit auto show.
Ford’s operating profit in North America topped the company’s previous record of $6.2 billion in 2011. The region’s operating margin of 10.4 per cent for the full year also surpassed 2010’s record of 8.4 per cent. Ford has said it wants to achieve profit margins of 8 per cent to 10 per cent in North America over the long term in an industry where 5 per cent is considered respectable.
Increased demand for Dearborn, Michigan-based Ford’s F-Series, which have led the full-size pickup segment in the US for 36 years, is pacing the company’s results at home. F-Series deliveries climbed 10 per cent last year to 645,316, surpassing the 4.7 per cent gain in Ford’s total US vehicle sales.