Ford: First profitable year since ’05
Ford Motor reported its first full-year profit since 2005 and said it expects to be profitable again in 2010.
The automaker, which has outpaced the turnaround at both its domestic and some overseas rivals, said Thursday that it earned $2.7 billion in 2009. The company was helped by special items that added $2.6 billion to its bottom line during the year.
But even without that assistance, Ford (F, Fortune 500) essentially broke even after taxes. That’s far better than the loss of 31 cents per share that analysts had forecast for 2009. Ford lost $7.3 billion, or $3.20 a share, on that basis in 2008.
Ford shares rose about 5% in pre-market trading following the announcement.
For the fourth quarter, the company reported a net profit of $868 million. Its operating income of $1.6 billion, or 43 cents a share, was a dramatic improvement from the operating loss of $3.3 billion, or $1.40 a share a year earlier. This also easily topped forecasts of a 26 cent per share operating profit.
Ford’s automotive operations earned $1.1 billion in the quarter. The company also said auto operations added $3.1 billion to its cash flows in the quarter, a remarkable turnaround after drawing down the company’s cash reserves for years.
Ford also said it now expects to be profitable on a pre-tax basis in 2010. Previously, the company had said it expected profits to return in 2011 but that it was not yet willing to predict it would make money this year.
“While we still face significant business environment challenges ahead, 2009 was a pivotal year for Ford,” said Ford president and CEO Alan Mulally in the company’s statement. “Our progress has helped us gain market share in most of our major markets.”
One of those markets was the United States. Ford’s share rose to 16.1% from 15% in 2008, its first increase since 1995.
Still, auto sales plunged around much of the world in 2009. Ford’s global vehicle sales fell 11% to 4.8 million, causing the company’s overall revenue for the year to slide 14% to $118.3 billion.
But auto sales were much better in the fourth quarter, jumping 26% compared to a year ago to 1.4 million vehicles. Total revenue rose 22% to $35.4 billion, easily beating forecasts of $32.6 billion.
The company said it expects the sales momentum from the end of 2009 to continue into this year. And it has increased its first quarter production targets by 42% from year-ago levels.
Beyond the numbers, Ford has received critical acclaim in the industry. At the recent auto show in Detroit it won both the car and truck of the year awards for the hybrid version of its Fusion sedan and the all-electric Transit Connect van