By Dow Jones Business News,
January 28, 2014, 08:55:00 AM EDT
By Christina Rogers and Mike Ramsey
Driven by firm North American and Asian operations, Ford Motor Co.'s fourth-quarter net income rose 90% to $3.04
billion, or 74-cents a share.
The results also underlined the company's improving performance in Europe but new struggles in South America.
Pretax operating profit fell $402 million to $1.28 billion, or 31-cents a share, better than Wall Street analysts
had forecast. The Dearborn, Mich.-based auto maker said the quarter's revenue rose 4% to $37.6 billion.
Meantime, Ford's annual revenue was $146.9 billion and net income was $7.16 billion.
Ford also reaffirmed forecasts for 2014 that it outlined last month, saying pretax operating profit for this year
would fall to within a range of $7 billion to $8 billion from $8.6 billion in 2013. The auto maker cited higher outlays
for new model development and tougher competition.
"What we are seeing is a more competitive environment in pricing," said Ford Chief Financial Officer Bob Shanks. "
The yen has given the Japanese, as a whole, a more competitive base. In our case, we've got so many launches this year
so that will have some impact."
Ford also sees "escalating risk" in South America, particularly in Argentina and Venezuela, Mr. Shanks said.
In the fourth quarter, Ford's North American arm was bolstered by sales of its full-size pickups and by growth in
market share in general. Still, North America, which has carried the auto maker for the past several years, is facing
more competition and higher investment costs as it seeks to launch 16 new products in 2014.
Ford's North American division's pretax operating profit fell 9% to $1.7 billion from a year earlier in the fourth
quarter, partly due to higher warranty costs associated with a recall of the Ford Escape model. But for the year, the
region produced $8.8 billion in pretax profit, its best pretax operating profit since 2000.
Asia-Pacific produced a quarterly pretax profit of $106 million, compared with $39 million a year earlier. Sales in
China rose more than 50% in 2013, as Ford began selling a host of new vehicles, including several new sport-utilities
that have sold well.
Losses in Europe narrowed to $571 million in the quarter, as the market has begun to stabilize, and Ford has gained
market share with new products, including a small people mover called the B-Max. Ford is undergoing a restructuring
effort in Europe that will reduce production capacity 18% by closing three plants. Two of the plants already have
closed, and the third will close this year in Belgium.
South America swung to a loss of $126 million in the quarter, with profit declining as currency devaluations in
Venezuela caused Ford to write-down cash assets in the region. South America is a trouble spot for Ford and other auto
makers because currency devaluations and government-mandated price cuts on vehicles and parts in Venezuela could spread
to other countries in the region.
Ford Motor Credit said fourth-quarter pretax profit rose to $368 million.
Ford said rising interest rates on bonds as well as Ford's $5 billion cash infusion helped to reduce its
underfunded pension status to $9 billion from $18 billion a year ago.
Write to Christina Rogers at firstname.lastname@example.org and Mike Ramsey at email@example.com
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