Ford has reported full-year 2004 net income of $3.5 billion, or $1.73 per share, an increase of nearly $3 billion, or $1.46 per share, from a year ago. The result was in line with analysts’ expectations and reflects a strong Q4 as well as the continued boost from Ford’s finance operations.
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Ford Europe returned to profit in 2004 but luxury cars division PAG lurched heavily into the red.
For the fourth quarter, the company reported net income of $104 million, or 6 cents per share. This compares with a fourth-quarter loss of $793 million, or 43 cents per share, in 2003.
For the full year, Ford’s worldwide automotive sector earned a pre-tax profit of $850 million, a $697 million improvement from $153 million a year ago. Ford said that the improvement primarily reflected favourable net pricing and cost performance, the favourable effect of tax-related interest on refunds and settlements of prior-year audits, and improved parts profits, offset partially by unfavourable volume, mix and currency exchange.
Total company vehicle unit sales in 2004 were 6,798,000, an increase of 62,000 units from 2003. Fourth-quarter vehicle unit sales totalled 1,751,000, a decline of 133,000 units.
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By GlobalDataFor 2004, Ford’s North America automotive operations reported a full-year pre-tax profit of $1.5 billion, a decline of $327 million from 2003. The decline primarily reflected lower volumes, Ford said. For the year, North America’s revenue totalled $83 billion, down $580 million from a year earlier, as higher per-unit revenue offset partially a decline in vehicle unit sales.
Ford’s South America automotive operations reported a full-year pre-tax profit of $140 million, an increase of $269 million from a 2003 pre-tax loss of $129 million. The improvement primarily reflected higher volume and pricing, offset partially by higher commodity costs. Full-year revenue improved to $3 billion from $1.9 billion in 2003.
Ford Europe posted a full-year pre-tax profit of $114 million, reversing a pre-tax loss of $1.1 billion in 2003. The substantial improvement primarily reflected cost savings, and higher profits from a joint venture in Turkey. Revenue for the year totalled $26.5 billion, compared to $22.2 billion in 2003.
But the PAG luxury division results were grim. For 2004, PAG reported a full-year pre-tax loss of $740 million, a decline from a pre-tax profit of $171 million in 2003. Ford said the decline primarily reflected unfavourable currency exchange and lower volumes at Jaguar, offset partially by improved pricing. Full-year revenue for the group was $27.6 billion, up $2.8 billion from 2003.
For the full year, excluding special items, Ford’s Financial Services sector reported a record pre-tax profit of $5 billion, up $1.7 billion over 2003, driven by strong profits at both Ford Motor Credit Company and The Hertz Corporation. Ford Credit reported record net income of $2.9 billion in 2004, up $1.1 billion from earnings of $1.8 billion a year earlier. On a pre-tax basis, excluding special items, Ford Credit earned $4.4 billion in 2004, compared with $3 billion in the previous year. The increase in earnings primarily reflected improved credit loss performance and leasing results.
“In 2004, our company gained momentum, delivering more revenue and earnings, more new products, and more innovative breakthroughs, such as the Escape Hybrid, the industry’s first full-hybrid sport utility vehicle,” said Chairman and Chief Executive Officer Bill Ford. “We also confronted operating challenges with our Jaguar brand and high industry marketing costs. Looking forward, we’re going to build on our successes as we launch more new products in 2005 and beyond.”
In addition, the company said 2004 net income was affected by a fourth-quarter pre-tax charge taken to reduce the value of a receivable owed to Ford by Visteon Corporation. The receivable relates to costs for which Visteon reimburses Ford over the long-term for post-retirement health care benefits and life insurance provided to Ford hourly employees assigned to Visteon and other select Visteon employees.
“Despite the increasingly tough conditions in the global auto market, we continued to make progress in building on the basics,” said Don Leclair, executive vice president and chief financial officer. “We are pleased with the growing acceptance of our new products, as well as with the record earnings of our Financial Services sector.”
Ford predicts 2005 profit rise
