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Jan. 20 (Bloomberg) -- Ford Motor Co., the world's third-
largest automaker, had its fourth straight quarterly profit as
earnings from the company's finance business offset losses from
making cars and trucks.
Fourth-quarter net income was $104 million, or 6 cents a
share, compared with a net loss of $793 million, or 43 cents a
share, a year earlier, when Ford had costs related to a former
parts-making unit. Revenue fell 2.5 percent to $44.7 billion, the
Dearborn, Michigan-based company said today in a statement, as
U.S. vehicle sales dropped 3.8 percent.
``Earnings were weaker than expected,'' Morgan Stanley
analyst Stephen Girsky wrote in a research report today. ``The
quality of the earnings appeared poor.''
Chief Executive William Clay Ford Jr., 47, has been buoyed
by profits from the Ford Motor Credit Co. lending unit whilehoping that new models introduced in late 2004 and this year will
win back customers and restore profit from making vehicles.
The $470 million pretax loss at the worldwide automotive
unit was larger than expected, while Ford appeared to benefit
from tax and interest items, said Girsky, who has an ``equal-
weight/cautious'' rating on the shares. Profit estimates and the
share price are likely to decline, he wrote.
Automotive Losses
After posting a first-quarter pretax profit of $1.8 billion,
Ford's worldwide automotive operations have had three consecutive
quarterly losses. Ford's U.S. market share at the end of 2004 was
19.6 percent, the lowest since at least 1981.
``We need the automotive business to contribute more,''
Chief Financial Officer Don Leclair said on a conference call
today with reporters and analysts. ``Our challenge is to get the
automotive side to be improved.''
Ford Credit, which makes loans for Ford-built cars and
trucks, had fourth-quarter net income of $543 million, up 16
percent from a year earlier. Excluding some costs, Ford Motor's fourth-quarter profit was
$555 million, or 28 cents a share. On that basis, Ford was
expected to earn 27 cents a share, the average estimate of
analysts surveyed by Thomson Financial. The revenue decline was
the first in five quarters.
Ford's shares fell 25 cents to $13.67 at 12:02 p.m. in New
York Stock Exchange composite trading.
The company's 7 1/8 percent maturing in November 2025 rose
2.88 cents on the dollar to 100 cents on the dollar, according to
Trace, the bond price reporting system of the National
Association of Securities Dealers. The yield fell to 7.1 percent
from 7.4 percent.
Visteon
The fourth-quarter results include aftertax expenses of $390
million, or 18 cents a share, to reduce the value of a receivable
owed to Ford by Visteon Corp., the automaker's largest supplier.
The receivable owed to Ford relates to costs Visteon will
reimburse Ford for post-retirement health care benefits and life
insurance provided to Ford hourly employees at Visteon starting
in 2006 and running through 2049, Leclair said.
Ford has about 18,000 employees stationed at Visteon, a
former subsidiary that was spun off in 2000. Ford agreed with the
United Auto Workers union in 1999 that union-represented workers
at Visteon plants would remain Ford employees. Ford pays the
workers and Visteon reimburses the automaker.
``Our view of Visteon is they have some structural and
strategic changes to make,'' Leclair said on the conference call.
Ford and Visteon are negotiating further changes in the spinoff.
The Visteon cost that Ford recorded in the fourth quarter does
not ``signal anything'' about a new agreement, he said.
In the fourth quarter of 2003, Ford had $1.6 billion in
costs linked to Visteon. Excluding those costs, Ford had a profit
of $594 million, or 30 cents a share.
First Since 1999
Ford's net income for 2004 totaled $3.49 billon, or $1.73 a
share, an increase from $495 million, or 27 cents a share, in
2003. It was the first year of four quarterly profits for Ford
since 1999.
Excluding costs from job cuts and a planned closing of a
Jaguar plant in the U.K., Ford earned $2.11 a share, matching
with the $2.11 a share forecast by analysts surveyed by Thomson
Financial.
Ford Credit had record net income of $2.9 billion in 2004,
an increase from $1.8 billion the year before.
``How strong does Ford Credit remain as interest rates go
up?'' said Argus Research analyst Kevin Tynan, who has a ``hold''
rating on Ford, in an interview today. ``It's a good day if the
automotive operation breaks even.''
Shrinking Portfolio
Ford Credit's loan portfolio has been shrinking. Since late
2001, the unit has been reducing loans made to customers of
vehicles not produced by Ford.
``We're not going to continue at that level,'' Dave Cosper,
chief financial officer of Ford Credit, said of 2004 results. ``I
expect a strong year'' in 2005, he said, without making a
specific forecast. He spoke on the same conference call as
Leclair.
Ford didn't make a first-quarter forecast today. The
automaker will make its forecast during a Jan. 25 presentation in
New York. Ford is expected to report profit, excluding some
costs, of 67 cents a share in the first quarter, according to
analysts surveyed by Thomson Financial.
General Motors, the biggest U.S. automaker, yesterday said
it expected first-quarter profit to decline. Detroit-based GM
said net income fell to $630 million, or $1.11 a share, from $1
billion, or $2.13 a share, a year earlier.
Profit Sharing
Ford said in a separate statement today that it will pay an
average $600 profit-sharing bonus to U.S. salaried employees. The
company said it ``expects to pay modest performance bonuses'' for
eligible salaried employees.
Ford's 3.8 percent sales decline in the fourth quarter
compared with an industrywide increase of 2 percent, according to
Bloomberg calculations based on Autodata Corp. monthly sales
reports. Ford's U.S. sales for the year dropped 4.5 percent.
The company's 19.6 percent U.S. market share in 2004 was
down 1.2 percentage points from 20.8 percent a year earlier.
During the year, Toyota Motor Corp. and Nissan Motor Co. boosted
their share of the market by 1 percentage point. Toyota's rose to
12.2 percent from 11.2 percent, and Nissan's rose to 5.8 percent
from 4.8 percent.
Profit Vs. Market Share
Bill Ford has said he's willing to sacrifice some market
share to boost the amount he makes from each vehicle. The
automaker has scaled back sales to rental-car companies and is
emphasizing sales of cars and trucks with more options.
The company last year introduced new car models such as the
Five Hundred sedan and redesigned Mustang sports car. The company
is trying to lessen its dependence on truck sales, particularly
the F-Series pickup trucks, which accounted for 30 percent of the
company's U.S. vehicle sales in 2004.
Ford earlier this month unveiled the Fusion and Zephyr and
other new models at the North American International Auto Show in
Detroit. The Fusion and Zephyr go on sale in the second half of
2005.
Results by Region
Ford's North American auto operations, the company's
largest, had a fourth quarter pretax loss of $470 million
compared with a year-ago profit of $205 million on lower vehicle
sales. For the year, North American operations had a pretax
profit of $1.5 billion, a decline of $327 million from 2003.
Ford of Europe had a pretax loss of $69 million for the
quarter, compared with a year-ago pretax profit of $62 million.
The unit had a full-year pretax profit of $114 million compared
with a $1.1 billion loss in 2003, its first full-year profit in
seven years. Ford cut jobs in Europe to reduce costs.
Premier Automotive Group, the company's European-based
luxury brands, had a pretax loss of $255 million, with a pretax
profit of $114 million a year ago. The company said a weakening
U.S. dollar and lower sales at Jaguar contributed to the loss.
For the year, Premier had a pretax loss of $740 million,
compared with a pretax profit of $171 million the year before.
The unit's Volvo brand is profitable while Jaguar is losing
money. Ford in September announced a plan to cut jobs and close a
Jaguar plant.
largest automaker, had its fourth straight quarterly profit as
earnings from the company's finance business offset losses from
making cars and trucks.
Fourth-quarter net income was $104 million, or 6 cents a
share, compared with a net loss of $793 million, or 43 cents a
share, a year earlier, when Ford had costs related to a former
parts-making unit. Revenue fell 2.5 percent to $44.7 billion, the
Dearborn, Michigan-based company said today in a statement, as
U.S. vehicle sales dropped 3.8 percent.
``Earnings were weaker than expected,'' Morgan Stanley
analyst Stephen Girsky wrote in a research report today. ``The
quality of the earnings appeared poor.''
Chief Executive William Clay Ford Jr., 47, has been buoyed
by profits from the Ford Motor Credit Co. lending unit whilehoping that new models introduced in late 2004 and this year will
win back customers and restore profit from making vehicles.
The $470 million pretax loss at the worldwide automotive
unit was larger than expected, while Ford appeared to benefit
from tax and interest items, said Girsky, who has an ``equal-
weight/cautious'' rating on the shares. Profit estimates and the
share price are likely to decline, he wrote.
Automotive Losses
After posting a first-quarter pretax profit of $1.8 billion,
Ford's worldwide automotive operations have had three consecutive
quarterly losses. Ford's U.S. market share at the end of 2004 was
19.6 percent, the lowest since at least 1981.
``We need the automotive business to contribute more,''
Chief Financial Officer Don Leclair said on a conference call
today with reporters and analysts. ``Our challenge is to get the
automotive side to be improved.''
Ford Credit, which makes loans for Ford-built cars and
trucks, had fourth-quarter net income of $543 million, up 16
percent from a year earlier. Excluding some costs, Ford Motor's fourth-quarter profit was
$555 million, or 28 cents a share. On that basis, Ford was
expected to earn 27 cents a share, the average estimate of
analysts surveyed by Thomson Financial. The revenue decline was
the first in five quarters.
Ford's shares fell 25 cents to $13.67 at 12:02 p.m. in New
York Stock Exchange composite trading.
The company's 7 1/8 percent maturing in November 2025 rose
2.88 cents on the dollar to 100 cents on the dollar, according to
Trace, the bond price reporting system of the National
Association of Securities Dealers. The yield fell to 7.1 percent
from 7.4 percent.
Visteon
The fourth-quarter results include aftertax expenses of $390
million, or 18 cents a share, to reduce the value of a receivable
owed to Ford by Visteon Corp., the automaker's largest supplier.
The receivable owed to Ford relates to costs Visteon will
reimburse Ford for post-retirement health care benefits and life
insurance provided to Ford hourly employees at Visteon starting
in 2006 and running through 2049, Leclair said.
Ford has about 18,000 employees stationed at Visteon, a
former subsidiary that was spun off in 2000. Ford agreed with the
United Auto Workers union in 1999 that union-represented workers
at Visteon plants would remain Ford employees. Ford pays the
workers and Visteon reimburses the automaker.
``Our view of Visteon is they have some structural and
strategic changes to make,'' Leclair said on the conference call.
Ford and Visteon are negotiating further changes in the spinoff.
The Visteon cost that Ford recorded in the fourth quarter does
not ``signal anything'' about a new agreement, he said.
In the fourth quarter of 2003, Ford had $1.6 billion in
costs linked to Visteon. Excluding those costs, Ford had a profit
of $594 million, or 30 cents a share.
First Since 1999
Ford's net income for 2004 totaled $3.49 billon, or $1.73 a
share, an increase from $495 million, or 27 cents a share, in
2003. It was the first year of four quarterly profits for Ford
since 1999.
Excluding costs from job cuts and a planned closing of a
Jaguar plant in the U.K., Ford earned $2.11 a share, matching
with the $2.11 a share forecast by analysts surveyed by Thomson
Financial.
Ford Credit had record net income of $2.9 billion in 2004,
an increase from $1.8 billion the year before.
``How strong does Ford Credit remain as interest rates go
up?'' said Argus Research analyst Kevin Tynan, who has a ``hold''
rating on Ford, in an interview today. ``It's a good day if the
automotive operation breaks even.''
Shrinking Portfolio
Ford Credit's loan portfolio has been shrinking. Since late
2001, the unit has been reducing loans made to customers of
vehicles not produced by Ford.
``We're not going to continue at that level,'' Dave Cosper,
chief financial officer of Ford Credit, said of 2004 results. ``I
expect a strong year'' in 2005, he said, without making a
specific forecast. He spoke on the same conference call as
Leclair.
Ford didn't make a first-quarter forecast today. The
automaker will make its forecast during a Jan. 25 presentation in
New York. Ford is expected to report profit, excluding some
costs, of 67 cents a share in the first quarter, according to
analysts surveyed by Thomson Financial.
General Motors, the biggest U.S. automaker, yesterday said
it expected first-quarter profit to decline. Detroit-based GM
said net income fell to $630 million, or $1.11 a share, from $1
billion, or $2.13 a share, a year earlier.
Profit Sharing
Ford said in a separate statement today that it will pay an
average $600 profit-sharing bonus to U.S. salaried employees. The
company said it ``expects to pay modest performance bonuses'' for
eligible salaried employees.
Ford's 3.8 percent sales decline in the fourth quarter
compared with an industrywide increase of 2 percent, according to
Bloomberg calculations based on Autodata Corp. monthly sales
reports. Ford's U.S. sales for the year dropped 4.5 percent.
The company's 19.6 percent U.S. market share in 2004 was
down 1.2 percentage points from 20.8 percent a year earlier.
During the year, Toyota Motor Corp. and Nissan Motor Co. boosted
their share of the market by 1 percentage point. Toyota's rose to
12.2 percent from 11.2 percent, and Nissan's rose to 5.8 percent
from 4.8 percent.
Profit Vs. Market Share
Bill Ford has said he's willing to sacrifice some market
share to boost the amount he makes from each vehicle. The
automaker has scaled back sales to rental-car companies and is
emphasizing sales of cars and trucks with more options.
The company last year introduced new car models such as the
Five Hundred sedan and redesigned Mustang sports car. The company
is trying to lessen its dependence on truck sales, particularly
the F-Series pickup trucks, which accounted for 30 percent of the
company's U.S. vehicle sales in 2004.
Ford earlier this month unveiled the Fusion and Zephyr and
other new models at the North American International Auto Show in
Detroit. The Fusion and Zephyr go on sale in the second half of
2005.
Results by Region
Ford's North American auto operations, the company's
largest, had a fourth quarter pretax loss of $470 million
compared with a year-ago profit of $205 million on lower vehicle
sales. For the year, North American operations had a pretax
profit of $1.5 billion, a decline of $327 million from 2003.
Ford of Europe had a pretax loss of $69 million for the
quarter, compared with a year-ago pretax profit of $62 million.
The unit had a full-year pretax profit of $114 million compared
with a $1.1 billion loss in 2003, its first full-year profit in
seven years. Ford cut jobs in Europe to reduce costs.
Premier Automotive Group, the company's European-based
luxury brands, had a pretax loss of $255 million, with a pretax
profit of $114 million a year ago. The company said a weakening
U.S. dollar and lower sales at Jaguar contributed to the loss.
For the year, Premier had a pretax loss of $740 million,
compared with a pretax profit of $171 million the year before.
The unit's Volvo brand is profitable while Jaguar is losing
money. Ford in September announced a plan to cut jobs and close a
Jaguar plant.