Ford's earnings rise in fourth quarter, down for full year
Monday, January 23rd 2006, 8:38 am
By: News On 6
DEARBORN, Mich. (AP) _ Ford Motor Co., the nation's second biggest automaker, said Monday that it earned $124 million in the fourth quarter, up 19 percent from the previous year thanks to the sale of its Hertz Corp. rental division and improved profits for its luxury brands. The company said it earned $2 billion for the year, down 42 percent from a year earlier but still its third consecutive yearly profit.
The earnings report came several hours before Ford was scheduled to announce a restructuring plan that was to include plant closings and job cuts in its struggling North American division. Ford shares rose 37 cents to $8.27 in premarket trading.
Ford said earnings amounted to 8 cents a share for the October-December period compared with $104 million, or 6 cents a share, a year ago. Revenue was $47.6 billion for the quarter, up from $44.9 billion a year ago.
Ford said several special items reduced its earnings by 6 cents per share in the fourth quarter. Those included a pretax charge of $1.3 billion for ongoing restructuring at its Jaguar and Land Rover divisions, a $962 million charge for personnel reductions and a profit of $1.4 billion for the sale of its Hertz Corp. rental car division.
Excluding all special items, including changes in accounting, Ford said its after-tax income was $511 million in the fourth quarter, or 26 cents per share, compared to $554 million, or 28 cents per share, a year ago.
Analysts surveyed by Thomson Financial were looking for earnings of a penny per share. Those estimates typically exclude special items.
Ford's full-year earnings of $1.04 a share compared with a profit of $3.5 billion, or $1.73 per share, in 2004. Full-year revenues were $178.1 billion, up from $171.7 billion a year ago.
Ford said special items reduced its full-year income by 15 cents per share. That included a $468 million charge related to the restructuring of Visteon Corp., Ford's former parts division. Ford agreed to take back 23 Visteon facilities last fall in a deal designed to stave off bankruptcy at the supplier.
Its North American automotive operations lost $143 million in the October-December period, an improvement from a loss of $470 million the same period a year ago. Ford said the improvement was due to cost reductions and favorable vehicle pricing but was offset by losses at Visteon facilities now controlled by Ford.
For the year, the North American operations reported a loss of $1.6 billion in 2005, as sales of sport utility vehicles plummeted in the wake of high gas prices. North American sales were $81.4 billion, down from $83 billion a year before. The automaker's U.S. sales were down 4 percent in 2005.
Ford's worldwide automotive sector reported a loss of $12 million for the quarter, an improvement from a loss of $470 million a year ago. The company said that reflected favorable net pricing, exchange rates and other factors.
Worldwide automotive revenues for 2005 were $154.5 billion, up from $147.1 billion a year ago. Ford Motor Credit Co., Ford's finance division, reported net income of $2.5 billion, down $370 million from the year before due to lower volumes and margins.
Losses in North America were partially offset by gains elsewhere. Ford Europe and the Premier Automotive Group, which includes the Jaguar, Volvo and Land Rover brands, reported a combined pretax profit of $36 million for the year, versus a loss of $626 million in 2004.
Full-year profits in Asia/Pacific and Africa were $61 million, up from $16 million a year ago, and profits in South America more than doubled to $389 million.
``Excluding North America, our automotive operations made great progress in 2005,'' Ford Chairman and CEO Bill Ford said in a statement. ``We must keep working to improve our business in each and every region.''
Ford said it reduced employment in 2005 by 10,000 people due to layoffs, buyouts and attrition. Ford has around 300,000 employees worldwide.