Market shrugs as Ford reports $13.6-billion 4Q net income
By Alisa Priddle, Detroit Free Press
Jan. 27--The market did not appreciate Ford's fourth-quarter results -- bolstered by an accounting adjustment -- but which showed weakness outside North America.
Ford shares tumbled 5.5% to $12.04 in the first half-hour of trading this morning after the automaker posted a $190 million loss in Europe and $83 million loss in Asia Pacific Africa.
Barclays Capital analyst Brian Johnson said all regions were about $100 million below estimates.
But the strength of the North American market and a non-cash accounting change contributed to a net income for the quarter of $13.6 billion or $3.40 a share. This marks Ford's 11th consecutive quarterly profit and the results far exceed the same period in 2010 when earnings fell 79% to $190 million.
Operating profit for the quarter was $1.1 billion or 20 cents a share, a decrease of $189 million on sales of 1.4 million vehicles.
"The quarter was driven by North America," said Chief Financial Officer Lewis Booth.
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 United Auto Workers contains a more transparent profit-sharing formula: $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, meaning some workers can expect to receive an additional $2,448 in March. Payouts are larger for those who put in more hours, less for those who did not.
Ford also reported $280 in costs associated with the new United Auto Workers contract negotiated last fall that included a signing bonus.
It was still the automaker's best year since 1998.
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.