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Tuesday, January 29, 2013 8:29:52 AM
Read more: http://www.autonews.com/#ixzz2JN3fajgh
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.
North America shines
North America was once again overwhelmingly the company's profit center.
Ford's North America region posted pretax profits of a record $1.87 billion in the fourth quarter, more than double the year-earlier level, and a record $8.3 billion, up 35 percent, for all of 2012. The records were the highest since the company began listing North America as a separate region in 2000.
Revenues rose 13 percent to $22.1 billion in the fourth quarter and 7 percent to $79.9 billion in 2012.
Ford expects to gain market share in North America this year based on stronger pickup sales and the fact that 2013 will be the first full year the redesigned Fusion and Escape have been on sale. The vehicles compete in two of the industry's biggest segments.
"We're going to benefit from that," Shanks said. "We're going to benefit from a stronger industry including stronger full-size pickup segmentation."
Europe recession 'likely'
"We think Europe will be perhaps even lower than we thought," Shanks said, due in part to continuing high unemployment in some regions, particularly in southern Europe. "We're likely to see a recession in the first half," with possibly a weak recovery in the second half, he said.
Ford said it now expects European industry sales volume this year to be in the lower end of the range of 13 million to 14 million units. In addition, Ford said it is being hurt by higher pension costs due to lower interest rates, and a stronger euro.
In Europe, Ford's fourth-quarter pretax operating loss of $732 million widened sharply from a loss of $190 million a year earlier.
For all of 2012, Ford's pretax loss of $1.75 billion in Europe compared with a loss of $27 million a year earlier, as the region's economy remained mired in the ongoing debt crisis.
European revenues dropped 22 percent in the quarter to $6.5 billion, and 21 percent to $26.6 billion in 2012.
Ford is employing the same strategy to dig out of its European hole that it used in North America: closing factories to trim capacity while at the same time investing in a new generation of products.
Ford said last year that it would close three European plants: two in England and one in Genk, Belgium.
In an interview with Bloomberg during the Detroit auto show in early January, Shanks predicted that Ford's European losses will begin to disappear in about two years.
"Even with a no-change bottom line in Europe in '13 versus '12, we're well on our way in terms of a transformation that will get that part of the business back on track," Shanks said. "We didn't fix North America in six months. It took years. The same thing will happen in Europe."
At the Automotive News World Congress this month, Mulally said of Europe: "We think we can be profitable, with the restructuring actions that we've taken and all the new products that we're introducing, by mid-decade."
Read more: http://www.autonews.com/article/20130129/OEM/130129894#ixzz2JN3uzNJ0
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