Ford Motor on Thursday reported full year 2009 pre-tax operating profit, excluding special items, of $454m, a $7.3 billion improvement over a year ago. Full year net income of $2.7 billion, or 86 cents per share, was helped by favourable pricing, structural cost reductions, gains on debt reduction and strong Ford Credit results.

The company now expects to be profitable – pre-tax – for full year 2010, excluding special items.

“This marks the company’s first full year of positive net income since 2005 and a $17.5 billion improvement over 2008,” the automaker said in a statement.

Q4 net income was $868m, 25 cents a share, a $6.8bn year on year improvement. Excluding special items, pre-tax operating profits were $1.8bn, up $5.5bn. After tax, excluding special items, the automaker posted an operating profit of $1.6bn, 43 cents a share, versus a $3.3bn loss ($1.40) in Q4 2008.

North American operations made a Q4 pre-tax operating profit, excluding special items, of $707m, the second consecutive quarter in the black. Ford South America, Ford Europe and Ford Asia Pacific Africa also posted pre-tax operating profits for the final quarter.

Fourth quarter revenue was $35.4bn, up $6.4bn year on year. Full-year revenue was $118.3bn, down $19.8bn.

The healthy result will see 43,000 US hourly employees pocket an average $450 each under a profit sharing deal agreed in 2007 with the United Auto Workers (UAW) union. But there will be no 2009 bonuses for salaried employees though they will get merit increases in 2010 and a retirement plan matching programme was reinstated on 1 January.

Automotive structural costs came down another $500m in the fourth quarter, taking the full-year tally to $5.1bn, over a quarter above the target of about $4bn, as manufacturing and engineering costs were lowered, jobs were cut and the automaker made progress on using more common global platforms and product development processes – the North American launches of European-designed Fiesta (2010), Focus and C-Max (2011) will be key results of that strategy.

Some analysts have recently been eyeing Ford’s cashflow versus its two taxpayer bailed-out Detroit rivals. Ford said it ended 2009 with $25.5bn in automotive gross cash compared with $23.8bn at the end of the third quarter of 2009 while automotive operating-related cash flow was $3.1bn positive during the fourth but $300m negative for the full year; albeit an improvement of $19.2bn from 2008 levels.

Fourth quarter actions includes issuing $2.9bn in a convertible debt offering and an agreement with revolving lenders to extend the maturities of $7.9bn of debt to 2013 from 2011.

“While we still face significant business environment challenges ahead, 2009 was a pivotal year for Ford and the strongest proof yet that our One Ford plan is working and that we are forging a path toward profitable growth by working together as one team, leveraging our global scale,” said Ford president and CEO Alan Mulally.

“We delivered very encouraging results in the fourth quarter and for full year 2009 despite severe economic headwinds, although our transformation remains a work in progress,” said CFO Lewis Booth. “We are committed to staying absolutely focused on executing our plan to deliver profitable growth.”

In the fourth quarter of 2009, Ford’s automotive sector reported a pre-tax operating profit of $1.1bn, compared with a loss of $3.3bn a year ago. Worldwide automotive revenue was $32.6bn, up $7.3bn, as more vehicles were sold at higher prices. Total vehicle wholesales were 1,440,000 units, compared with 1,139,000 units in Q4 2008.

North America operations reported a Q4 pre-tax operating profit of $707m, compared with a loss of $1.9bn. Fourth quarter revenue was $15.8bn, up from $11.3bn a year ago.

South America reported pre-tax operating profit of $369m, compared with $105m. Revenue was $2.6bn, up from $1.7bn a year ago.

Europe booked a pre-tax operating profit of $305m, compared with a $338m loss in 2008 on revenue up to $8.7bn from $7.6bn.

Asia Pacific Africa saw a pre-tax operating profit of $19m, compared with a loss of $208m a year ago on revenue of $1.6bn, up from $1.4bn.

Volvo, which should be sold to Geely by the end of Q2, 2010, booked a pre-tax operating loss of $32m, compared with a loss of $736m a year ago.

Fourth quarter revenue was $3.9bn, up from $3.3bn a year ago.

Ford Credit reported pre-tax Q4 operating profit of $696m, compared with a loss of $372m a year ago.

Ford plans to be pre-tax profitable for full year 2010, excluding special items (which will include Volvo results until the sale completes) with positive automotive operating related cash flow which should be at a lower rate than that run through in the second half of 2009.

Capital spending is expected to be in the range of $4.5bn to $5bn, as the focus on the product plan continues.

“The company has completed major cost reduction actions over the past four years to substantially restructure its business, including personnel levels, facilities and related costs, and the settlement of the UAW retiree health care VEBA agreement. Ford expects automotive structural costs to be somewhat higher compared with 2009 as it increases production to meet demand,” the automaker said.

It expects US full year industry sales in the range of 11.5 to 12.5m units, including medium and heavy trucks, and 13.5m to 14.5m for the 19 markets it tracks in Europe. Market shares are seen staying much the same as in 2009.

Ford Credit should be profitable in 2010 but will make less than 2009 due to lower revenue and the non-recurrence of favourable factors that boosted the bottom line last year.

“Ford’s full year 2011 guidance remains unchanged. Based on its planning assumptions, the company remains on track to be solidly profitable on a pre-tax basis excluding special items, with positive automotive operating related cash flow,” it said.