Ford Motor Co. ( F ) posted a robust 55.0%
rise in earnings per share to 31 cents in the fourth quarter of
2012 from 20 cents in the same quarter of 2011 (all excluding
special items). With this, the company has beaten the Zacks
Consensus Estimate of 26 cents as we expected due to the
combination of the stock's Zacks Rank #3 (Hold) and +3.85% ESP
(Read: Zacks Earnings ESP: A Better Method ).FORD MOTOR CO (F): Free Stock Analysis ReportGENERAL MOTORS (GM): Free Stock Analysis ReportMERITOR INC (MTOR): Free Stock Analysis ReportNAVISTAR INTL (NAV): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment
Ford's fourth-quarter pre-tax profit of $1.7 billion was the
highest in a decade. Meanwhile, net profit surged 55.7% to $1.2
billion from $797 million a year ago. Thanks to the impressive
North American results and, to some extent, solid improvements in
Asia Pacific Africa operations.
Total revenue grew 5.5% to $36.5 billion on a 7.5% rise in
wholesale volumes to 1.5 million units. It was higher than the
Zacks Consensus Estimate of $33.2 billion.
Full Year Results
For full year 2012, Ford reported an 8.5% decline in profits to
$5.6 billion or 6.6% fall in earnings per share to $1.41 (excluding
special items). However, the company's earnings per share exceeded
the Zacks Consensus Estimate of $1.35.
Revenues in the year slid 1.5% to $134.3 billion on a 0.5% fall in
wholesale volumes to 5.7 million units. It was higher than the
Zacks Consensus Estimate of $125.1 billion.
Ford has decided to make profit sharing payments to approximately
45,800 eligible U.S. hourly employees under the United Auto Workers
(UAW) union agreement. The company's North American pre-tax profits
of $8.3 billion will generate approximately $8,300 per eligible
employee on a full-year basis.
Ford Automotive segment registered a 5.8% rise in revenues to
$34.5 billion during the quarter. Pre-tax operating profit more
than doubled to $1.3 billion from $586.0 million in the fourth
quarter of 2011. The increase in revenues and profits was mainly
attributable to improvements in North America, South America and
Asia Pacific Africa operations.
For the full year, revenues dipped 1.2% to $126.6 billion. Pre-tax
operating profit decreased by the same magnitude to $6.3 billion,
as higher net pricing and the non-repetition of 2011 UAW
ratification bonuses were offset by higher structural costs and
In North America , revenues appreciated 12.7% to
$22.1 billion in the quarter. Pre-tax operating profit more than
doubled to $1.9 billion from $889 million a year ago due to
favorable market and non-repetition of ratification bonuses.
In South America , revenues escalated 10.7% to
$3.1 billion. Pre-tax operating profit rose 34.3% to $145 million
driven by favorable market and new product launches, partially
offset by higher costs and unfavorable exchange rates in
In Europe , revenues shrank 21.7% to $6.5
billion. The region had a broader operating loss of $732 million
compared with $190 million a year ago. The decline was attributable
to unfavorable volume and mix.
In Asia-Pacific & Africa , revenues soared
47.4% to $2.8 billion. The region saw a $122.0 million improvement
in pre-tax operating profit to $39.0 million in the quarter from a
loss of $83 million a year ago. The betterment can be attributable
to favorable market factors, offset partially by higher costs
associated with new products and investments to support higher
volumes and growth.
Ford's Other Automotive - consisting primarily of
interest and financing-related costs - saw a loss of $62 million
versus $138 million in the year-ago quarter. The narrower loss was
attributable to favorable fair market value adjustment on the
company's investment in Mazda.
The Financial Services segment recorded revenues of $2.0 billion,
which was flat compared with the year-ago level. Ford
Credit reported a pre-tax operating profit of $414
million, down 18.2% from $506 million. The decrease in profits was
attributable to lower credit loss reserve reductions and fall in
financing margin. Pre-tax operating profit from Other Financial
Services plunged 58.3% to $5.0 million.
For the full year, Financial Services segment reported a 4.9% fall
in revenues to $7.7 billion. Ford Credit saw a 29.4% fall in
pre-tax operating profit to $1.7 billion in the year.
Ford had cash and marketable securities of $24.4 billion as of
December 31, 2012, an improvement from $22.9 billion as of December
31, 2011. Total Automotive debt increased to $14.3 billion as of
December 31, 2012 from $13.1 billion as of December 31, 2011.
In 2012, the company's cash flow from continuing operations
declined to $6.3 billion from $9.4 billion a year ago. Meanwhile,
capital expenditures increased to $5.5 billion in the year from
$4.3 billion in 2011.
For full year 2013, Ford expects industry volume (including medium
and heavy trucks) of 15.0 million units-16.0 million units in the
U.S. compared with 14.8 million units in 2012; 13.0 million
units-14.0 million units in the 19 European markets covered by the
automaker compared with 14.0 million units in 2012; and 19.5
million-21.5 million units in China compared with 19.0 million
units in 2012.
The company expects its 2013 market share in the U.S. to be higher
than 2012, Europe to be almost the same as in 2012, and China to be
higher than 2012. Its market share in 2012 was 15.2% in the U.S.,
7.9% in Europe and 3.2% in China.
During the year, Ford anticipates total company pre-tax operating
profit to be the same as in 2012. Ford Credit is expected to report
flat pre-tax operating profit compared with 2012.
Other Stocks That Expect to Beat
We also see likely earnings beats coming from the following
industry peers of Ford:
General Motors Company ( GM ): Earnings ESP of
+6.00% and Zacks Rank #3 (Hold).
Navistar International Corporation ( NAV ): Earnings ESP of
+6.02% and Zacks Rank #3 (Hold).
Meritor Inc. ( MTOR ): Earnings ESP
of +25.00% and Zacks Rank #3 (Hold).