AUTO INDUSTRY Ford bounces back from loss
The company is working toward a goal of $7 billion in profit by 2006.
KNIGHT RIDDER NEWSPAPERS
DETROIT -- Ford Motor Co. reported its first annual profit in three years -- nearly half a billion dollars -- despite losing almost $800 million in the final three months of the year.
The year 2003 may go down in history as the year when Ford finally made money again, after losing a total of $6.4 billion during the previous two years.
But it may also be known as the year when Ford was surpassed by Japan's Toyota Motor Corp. as the world's No. 2 automaker, behind only General Motors Corp. The answer will come Monday, when Toyota is expected to release its sales totals.
However, Ford is continuing to claw its way toward its goal of making a pretax profit of $7 billion in 2006, and at least that much in subsequent years.
It lost money in the fourth quarter only because of one-time expenses totaling more than $2 billion. Most of those costs came from renegotiating the spinoff of former parts division Visteon Corp. and from job cuts in Europe.
Ignoring those types of costs -- as many investors do -- the company earned about $900 million, or 31 cents per share, in the last three months of 2003.
That just barely beat the expectations of Wall Street experts who help investors decide what stocks to buy and sell.
The Dearborn, Mich., automaker said it has topped the experts' predictions in each of the eight quarters since chairman Bill Ford replaced Jacques Nasser as chief executive and launched a five-year plan to cut 35,000 jobs, close plants and introduce new and profitable cars and trucks.
Accordingly, Ford shares have rebounded from a 10-year low of $6.58 last March to the mid-teens -- heights it hadn't seen in a year.
On Thursday, Ford shares fell 1 penny, or 0.1 percent, to $16.43.
"We're proud of what we've accomplished this past year at Ford, but we know there's still a lot more to do," said Don Leclair, Ford's chief financial officer.
For the year, Ford earned $495 million, or 27 cents per share, on total revenues of $164 billion. It lost almost $1 billion in 2002 and $5.5 billion in 2001.
For the last three months of 2003, Ford reported a net loss of $793 million, or 43 cents per share, six times the loss of $130 million, or 7 cents per share, for the same three months of 2002.
Ford expects to earn 40 cents to 45 cents a share in the first quarter of 2004, on its way to earning $1.20 to $1.30 a share for the year.
Source of profits
Ford's profits, however, continue to come almost exclusively from its financial services businesses, specifically Ford Credit.
Ford Credit posted a record annual net profit of $1.8 billion, up from $1.2 billion in 2002. GM's banking business also earned record profits in 2003, generating $2.8 billion. Unlike Ford Credit, GMAC includes a substantial mortgage business.