As widely expected, most Ford automotive operations outside the US and financial activities made full-year profits but North America again dragged the struggling company down.
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The automaker will announce a major restructuring of its North American operations today.
Ford nonetheless reported 2005 full-year net income of US$2bn, or $1.04 per share, though that was off some 43% on 2004’s $3.5bn, or $1.73 per share.
Excluding special items, Ford’s 2005 full-year after-tax income from continuing operations totalled $2.5bn, or $1.28 per share compared with $4.3bn ($2.11) a year ago.
Full-year sales and revenue for 2005 was $178.1bn, up from $171.7bn a year ago.
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By GlobalDataFourth quarter
For the fourth quarter, the automaker reported net income of $124m, or 8 cents per share, compared with $104m ($0.06), in 2004.
Excluding special items, fourth quarter after-tax income from continuing operations totaled $511m, or 26 cents per share, compared to $554m ($0.08) a year ago. Total sales and revenue in the fourth quarter were $47.6bn, up from $44.9bn.
Automotive sector
For the full year, Ford’s worldwide automotive sector reported a pre-tax loss of $1bn, compared with pre-tax profit of $850m a year ago.
For the fourth quarter, the global automotive sector reported a pre-tax loss of $12m, an improvement of $458m from a pre-tax loss of $470m a year earlier.
Worldwide automotive revenue for 2005 was $154.5bn, up from revenue of $147.1bn a year ago. Total fourth-quarter automotive revenue was $41.8bn, an increase of $3bn.
Total company vehicle unit sales in 2005 were 6,818,000, an increase of 20,000 units from 2004. Fourth-quarter vehicle unit sales totaled 1,853,000, an increase of 102,000 units.
The Americas
The Americas reported a 2005 full-year pre-tax loss of $1.2bn, compared to a pre-tax profit of $1.6bn in 2004. For the fourth quarter, the Americas had a pre-tax loss of $15m, an improvement of $411m compared to a pre-tax loss of $426m a year earlier.
North America: For 2005, Ford’s North America automotive operations reported a pre-tax loss of $1.6bn, a decline of $3bn from 2004. The decline primarily reflected unfavourable costs, lower market share, lower dealer inventories and adverse exchange. Sales totalled $81.4bn, compared with $83bn a year earlier.
North America automotive operations reported a Q4 pre-tax loss of $143m, compared to a loss of $470m in 2004.. Fourth-quarter sales were $22.1bn, compared with $21.1bn in 2004.
South America automotive operations reported a pre-tax profit of $389m, an increase of $249m. Full-year sales improved to $4.4bn from $3bn.
Q4 pre-tax profit was $128m, an improvement of $84m. Fourth-quarter sales were $1.3bn, up from $899m a year ago.
Europe
Ford Europe posted a full-year pre-tax profit of $136m, compared with $114m a year ago. Sales totalled $30.2bn, compared to $26.5bn in 2004.
Q4’s pre-tax profit was $66m, up from a loss of $69m a year ago. Sales totalled $8.2bn, compared to $7.4bn.
Premier Automotive Group reported a full-year pre-tax loss of $100m, an improvement on the loss of $740m a year ago. The improvement primarily reflected the impact of new products, primarily at Land Rover, that resulted in a richer mix and improved net pricing. Full-year sales for the group totalled $30.3bn, compared to $27.6bn.
PAG reported a Q4 pre-tax profit of $46m, an improvement of $301m. Sales totalled $8bn, compared to $7.8bn.
For the full year, Asia Pacific and Africa reported a pre-tax profit of $61m, an improvement of $16m. Sales totalled $7.7bn, an increase from $7bn.
But the regions reported a Q4 pre-tax loss of $39m, compared with a loss of $13m a year ago. The decline primarily reflected deterioration of results in Ford Australia due to lower volumes and unfavourable mix. Sales totalled $1.8bn, compared to $1.6bn.
Ford’s share of the full-year pre-tax profit of Mazda and associated operations was $255m, compared with $118m. Q4 share was a pre-tax-profit of $32m, compared with a pre-tax loss of $9m.
Financial services sector results include The Hertz Corporation to 21 December, 2005, the date on which it was sold. For the full year, excluding special items, financial services reported a pre-tax profit of $4.4bn, compared with $5bn last year.
Q4 pre-tax profit of $881m compared with $1bn a year ago.
Ford Motor Credit reported net income off $370m to $2.5bn in 2005. Q4 net income was $465m, down $78m from a year earlier.
Hertz reported full-year pre-tax profit of $569m, excluding special items, which was a year-over-year improvement of $76m. Q4 pre-tax profit was $121m, excluding special items, an increase of $14m.
“We accomplished many things in 2005, including the successful launch of the new Ford Fusion, Mercury Milan and Lincoln Zephyr, introduction of the company’s new innovation initiative, completion of the sale of Hertz, and an agreement with the UAW to help reduce rising health care costs,” said Ford chairman and chief executive officer Bill Ford in a statement.
“Excluding North America, our automotive operations made great progress in 2005; we must keep working to improve our business in each and every region.”
As an announcement of further cuts was imminent, the financial results statement noted that Ford during 2005 ended vehicle assembly at Jaguar’s Browns Lane facility and consolidated assembly at Castle Bromwich and also closed the Ford Lorain Assembly plant in Ohio.
More than 10,000 jobs were axed during 2005, through ‘personnel reduction actions’ and attrition.
2006 outlook
For 2006, the company is expecting another year of profitability from automotive operations outside of North America.
Overall, Ford’s global automotive operations are expected to have pre-tax losses in 2006, while Ford Motor Credit is expected to achieve pre-tax profits.
The company is assuming full-year industry volumes of 17m units in the US and 17.3m units in Europe.
Capital expenditures of approximately $7 billion are expected during 2006, while the company expects its year-end cash balance to be more than $20 billion.
