Ford said on Tuesday (28 January, 2013) 2013’s full year pre-tax profit of US$8.6bn was one of the company’s best years ever, boosted by the highest automotive pre-tax profit in over a decade and continued “solid profit” from Ford Credit. Of interest this side of the Atlantic, the fourth quarter pre-tax loss at Ford Europe was $161m lower at $571m.
The 2013 pre-tax profit of $8.6bn was up $603m compared with a year ago; full year earnings per share rose rose 21 cents to $1.62.
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Net income of $7.2bn, or $1.76 per share, was $1.49bn higher than a year ago, including pre-tax special item charges of $1.6bn and favorable tax special items of $2.2bn.
Pre-tax special item charges included $856m for layoffs and plant closures, primarily in the UK and Europe as part of the so called transformation plan, and $594m associated with the completed US salaried retiree voluntary lump sum payout programme as part of a pension ‘de-risking strategy’.
Fourth quarter pre-tax profit fell $402m to $1.3bn but fourth quarter earnings per share of 31 cents was the same as a year ago [in contrast to the analysts’ consensus we published yesterday – ed].
Net income was up $1.4bn to just over $3bn, or 74 cents per share.
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By GlobalData“We had an outstanding year in 2013, demonstrating that our One Ford plan continues to drive solid results and profitable growth for all,” said president and CEO Alan Mulally in a statement, adding: “We are well positioned for another solid year in 2014.”
The automaker said it would will make record profit-sharing payments to 47,000 hourly employees on 13 March – pre-tax profits of $8.8bn would generate about $8,800 per employee full year.
Automotive fourth quarter wholesale volume and revenue both increased year on year due to higher industry volumes in all regions and higher market shares in North America and Asia Pacific Africa.
Full year volume and revenue were higher than a year ago by 12% and 10%, respectively. Operating margin and Automotive pre-tax profit also were higher.
CFO Bob Shanks added: “Our results were driven by record profits in North America and Asia Pacific Africa, improved results in Europe and another solid year from Ford Credit.”
Fourth quarter
North America pre-tax profit dipped $200m to $1.7bn as higher costs, mainly warranty and structural, and lower net pricing were offset partially by better volumes and model mix. The higher warranty expense of about $300m was associated primarily with the Escape 1.6-litre recall announced in the fourth quarter.
Wholesale volume and revenue both improved 11% compared with 2012. North America’s operating margin was 9.9%, half a percentage point lower than a year ago, while pre-tax profit was $8.8bn, up about $400m.
South America’s pre-tax loss reduced $271m to $126m in the fourth quarter as higher costs, unfavorable volume and mix, and unfavorable exchange were offset partially by higher pricing due to partial recovery of the adverse effects of high local inflation and weaker local currencies.
Wholesale volume and revenue decreased by 6% and 11%, respectively, from a year ago. The lower volume was due to plant downtime in Brazil in preparation for new products in 2014 and lower production in Venezuela resulting from limited availability of US dollars.
Full year wholesale volume and revenue both improved 8% compared with last year. Operating margin was negative 0.3% and the pre-tax loss was $34m, both lower than a year ago.
Europe’s fourth quarter pre-tax loss was reduced $161m to $571m due to higher parts and services profits, offset partially by unfavorable exchange and higher costs.
Wholesale volume was down 3% but revenue improved by 10%.
Europe’s full year wholesale volume and revenue were up less than 1% and 5%, respectively. Operating margin was negative 5.8% and the pre-tax loss was $1.6bn, both improved from a year ago, despite higher restructuring costs of about $400m and lower industry volume.
Asia Pacific Africa booked a record fourth quarter pre-tax profit of $106m, up $67m due mainly to higher royalties from joint ventures and an insurance recovery. Higher costs, as Ford continues to invest for future growth, were a partial offset.
Wholesale volume was up 29% from a year ago, and net revenue, which excludes the company’s China joint ventures, grew 16%.
Wholesale volume in China was up 45% in the fourth quarter and about 50% for the full year.
Fourth quarter market share in the region was 3.9%, 0.5% higher than a year ago and a quarterly record. The improvement was driven by China, where market share improved 0.5% to a record 4.4%, reflecting mainly strong sales of the new EcoSport B-crossover and redesigned Kuga.
For the full year, wholesale volume and revenue improved 30% and 17%, respectively. Operating margin was 3.5% and pre-tax profit was a record $415m.
In the fourth quarter, total company production was up 79,000 units to about 1.6m but 23,000 units lower than most recent guidance. In the full year, Ford produced 6.4m units, up 646,000.
