Ford reports $13.6-billion 4Q net income
By Alisa Priddle, Detroit Free Press
Jan. 27--Ford reported strong fourth-quarter earnings today in closing out the automaker's most profitable year since 1998.
The automaker had a net income of $13.6 billion or $3.40 a share in its 11th consecutive quarterly profit -- far exceeding the final months of 2010 when earnings fell 79% to $190 million. But operating profit for the quarter was $1.1 billion or 20 cents a share, a decrease of $189 million on sales of 1.4 billion vehicles.
"The quarter was driven by North America," said Chief Financial Officer Lewis Booth, the only region not affected by deteriorating environmental conditions.
This year's final months were hampered by flooding in Thailand, the continuing economic crisis in Europe and additional labor costs associated with the new United Auto Workers contract negotiated last fall.
The automaker lost $190 million in Europe for the quarter and $83 million in Asia Pacific while also reporting higher than anticipated commodity costs that amounted to $2.3 billion for the full year instead of $2.2 billion.
"We delivered strong results for the full year as we continued to serve our customers around the world," said Ford CEO Alan Mulally in a statement.
Full-year net income totaled $20.2 billion, an increase of $13.6 billion from $6.6 billion in 2010. Operating profit of $8.8.billion exceeded $8.3 billion in 2010.
But the market reacted negatively to the substantial losses in Europe and Asia. Ford shares tumbled 5.5% to $12.04 in the first half-hour of trading this morning.
While the automaker did have a strong year, the results were unusually high due to an accounting adjustment.
Operating profit of $6.2 billion in North America triggers profit sharing for both white- and blue-collar employees.
The new labor agreement between Ford and the UAW contains a more transparent profit-sharing formula. Now $1 per worker for every $1 million in North American pretax profit goes into the Profit Sharing Fund.
That means $6,200 for the typical hourly worker who was compensated for at least 1,850 hours in 2011.
Ford's 41,600 eligible hourly workers received an advance payment in December based on the company's 2011 first-half pretax profits for North American of $3.752 billion. The fund held about $154 million and the typical advance payout was $3,752.