Ford Motor Company earned $US5.4 billion from continuing operations in 2000 on record revenues and volume as it made significant progress moving toward a consumer-focused organisation, the company said in a statement.
However, the profit on automotive operations fell from $US4.99 billion to $US3.62 billion on revenues up $US6 billion and European operations lost $US1.13 billion compared with a profit of $US50 million in 1999. The figure includes a number of one-off charges, including a $US1 billion charge for “asset impairment and restructuring”. However, last quarter results showed a profit of $US33 million, compared with a year-ago loss of $US30 million.
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The loss on South American operations was reduced by $US204 million to $US240 million but the news from the Asia-Pacific region was better: revenue up $US2 billion to $US6.2 billion and profits up from 1999’s $US38 million loss to a $US108 million profit.
In its statement, Ford said that, excluding unusual items, 2000 operating earnings were $US6.7 billion, or a record $US3.26 per fully diluted share, up 4 percent from 1999 on a comparable basis. Revenues for 2000 were a record at $US170 billion, up 6 percent. Vehicle unit sales rose three percent to a record 7.4 million. Full-year results for both periods exclude Visteon Corp. spun off on June 28.
“Customers are the foundation of our strategy,” said Jacques Nasser, president and CEO. “At the beginning of the year we reorganised the company around consumer business groups. We launched consumer-driven programmes and adopted new E-commerce initiatives across the organisation that together have transformed how we do business on a day-to-day basis.”
Ford Credit and The Hertz Corporation both had excellent results. Ford Credit’s earnings were up 22 percent to $US1.54 billion. Hertz had record income of $US358 million, its ninth consecutive year of increased earnings.
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By GlobalDataFOURTH QUARTER
Fourth quarter 2000 results were below a year ago, primarily because of weaker vehicle industry conditions in the United States. Earnings from continuing operations (excluding Visteon) were $US1.1 billion or 57 cents per fully diluted share of common and Class B stock. Quarterly results include a one-time charge of $US133 million, or 7 cents a share, for the write-down of assets associated with the Nemak joint venture on castings. A year ago, earnings from continuing operations were $US1.7 billion or $US1.39 per diluted share.
Fourth quarter 2000 operating earnings (excluding Visteon and one-time items) were $US1.2 billion, or 64 cents per fully diluted share of common and Class B stock. Operating earnings for the 1999 fourth quarter, were $US1.8 billion or 83 cents per diluted share, adjusted for the Value Enhancement Plan.
Highlights from 2000 included:
Shareholder value: Ford returned $US5.7 billion in cash to shareholders through the Value Enhancement Plan, spun off Visteon and purchased $US1 billion of stock under the $US5 billion stock repurchase plan.
Products and brands: Volvo was successfully integrated, the acquisition of Land Rover was completed and several new products were introduced, such as the Escape sport utility vehicle, Explorer Sport Trac, Volvo S60 and Mondeo and Transit in Europe; Ford Focus was the world’s best-selling car, and Ford F-Series the top-selling truck.
Transformation: Internet and E-business initiatives were implemented, including an employee personal computer programme, alliances with Yahoo and Trilogy Software, and the Wingcast telematics joint venture with Qualcomm Inc.
AUTOMOTIVE OPERATIONS
Ford Motor Company earned $US3.62 billion from continuing automotive operations in 2000 on revenues of $US141 billion. That compares to $US4.99 billion on revenues of $US135 billion a year ago.
Worldwide factory unit sales for the year were 7.4 million units, topping the previous record of 7.2 million set in 1999. Total costs were down $US500 million at constant volume and mix. Cost improvements were below the $US1 billion goal, primarily reflecting the Firestone tyre recall and the 3.8 litre engine warranty extension. Automotive gross cash at year-end was $US16.5 billion.
Income from continuing operations in the fourth quarter was $US629 million, down from $US1.35 billion a year ago. Revenue from automotive operations was $US35.1 billion versus $US37.3 billion. Worldwide vehicle unit sales in the fourth quarter were 1.8 million units, down from 1.9 million a year ago.
North America: Full-year 2000 earnings were $US4.89 billion on revenues of $US103.9 billion, down from $US5.42 billion on revenues of $US99.2 billion in 1999.
Fourth-quarter 2000 earnings were $US607 million on revenues of $US25.6 billion. That compares to $US1.47 billion on revenues of $US27.1 billion in 1999. The reduction primarily reflects lower industry sales and market share, and higher marketing costs.
“We’ve got the strongest product line-up we’ve ever had and look for another solid year in North America,” said Nasser. “We have already taken aggressive action to adjust our first quarter production schedules to meet softening market demand. We’ll continue to closely monitor economic conditions, and will not hesitate to take further actions if warranted.”
Europe: The full-year 2000 loss was $US1.13 billion on revenues of $US28.7 billion after several one-time items, including a $US1 billion charge for asset impairments and restructuring. On an operating basis, Europe had a loss of $US35 million. A year ago, Europe had a profit of $US50 million, or $US10 million on an operating basis, on revenues of $US29.3 billion.
Fourth-quarter results were a profit of $US33 million on revenues of $US7.3 billion reflecting continued cost reductions. The 1999 fourth quarter was a loss of $US30 million on revenues of $US8.5 billion.
South America: Full-year results improved to a loss of $US240 million on revenues of $US2.5 billion. Last year, Ford lost $US444 million on revenues of $US2.3 billion.
Fourth-quarter losses were $US31 million on revenues of $US642 million. The year-earlier period was a $US100 million loss on revenues of $US537 million. The improvement over a year ago reflects continued cost reductions and better revenue and product mix.
Asia-Pacific and other markets: Full-year profits were $US108 million on sharply higher revenues of $US6.2 billion. That compares to a $US38 million loss on revenues of $US4.2 billion.
Fourth-quarter 2000 results were a $US20 million profit on revenues of $US1.5 billion. That compares to a profit of $US10 million on revenues of $US1.1 billion.
“Our results outside North America, while improving, remained unacceptable in 2000. Our European operations are in the middle of a strategic restructuring and we expect a solid return to profitability this year. Our South American operations met their full-year 2000 milestone and will continue to improve this year,” Nasser said.
FORD CREDIT
Ford Credit earned $US1.54 billion in 2000, up 22 percent from 1999. In the fourth quarter, Ford Credit earned $US410 million, an increase of $US101 million, primarily because of higher volume and an improved net financing margin, offset partially by higher credit losses associated with the restructuring of North American operations.
HERTZ
Hertz reported full-year 2000 earnings of $US358 million, up from $US336 million in 1999. It was the ninth consecutive year of improved earnings for Hertz. In the fourth quarter Hertz earned $US56 million, down $US5 million from the year-earlier period.
MILESTONES
For 2000, Ford reached its milestones for revenue growth, South America, Asia-Pacific, capital spending, Ford Credit, Hertz and Visteon. Ford missed its milestones for total shareholder returns, total cost reductions and North America and Europe.
Ford last week set its financial milestones for 2001 and reaffirmed its customer-focused strategy. Ford has a goal of growing total company revenues by $US5 billion from record levels in 2000. In North America, Ford has targeted a four percent-plus return on sales despite softening market conditions. In Europe, the company has set a goal of improving results to a one percent-plus return on sales. Ford also has goals of improving results in South America and achieving profitability in Asia-Pacific.
Total costs, assuming constant volume and mix, are targeted to be reduced by $US1 billion, and capital spending will be contained at $US8 billion or less. Ford Credit has a milestone of improving returns and growing its earnings by 10 percent.
OUTLOOK
“We will face softening U.S. market conditions in 2001,” Nasser said. “However, our excellent portfolio of brands, customer focus and commitment to executing our strategies set us apart from our competitors. We are focused on improving our cost structure, bringing production in line with demand, generating positive cash flow and delivering another year of strong financial results.”
