Ford: $104 million 4th-quarter profit

The company's financial arm brings success despite an automotive side loss.
DEARBORN, Mich. (AP) -- Income from Ford Motor Co.'s financing and credit business helped the nation's No. 2 automaker swing to a $104 million profit in the fourth quarter despite a loss on the automotive side.
The company, which released fourth-quarter and year-end results Thursday, withheld its financial forecast for 2005 until next week.
Ford's profit for the October-December period compared with a loss of $793 million a year ago, when it incurred heavy charges for restructuring in Europe and a new agreement with Visteon Corp., its one-time auto parts subsidiary, which hurt the bottom line. The fourth-quarter profit amounted to 6 cents a share compared with a loss of 43 cents a share in the October-December period a year ago.
Ford's reliance on its financial services arm to offset a loss by its automotive operations came a day after a similar split was reported in results from larger rival General Motors Corp.
Excluding special items, Ford earned $555 million, or 28 cents a share, in the quarter, down 7 percent from a year ago but ahead of Wall Street forecasts. The consensus of analysts surveyed by Thomson First Call was for earnings of 27 cents a share.
Revenue for the quarter was $44.7 billion, down from $45.9 billion a year ago.
In a research note, Merrill Lynch analyst John Casesa said Ford benefited from unexpected tax relief in the fourth quarter, probably to the tune of 10 cents a share, which suggested to him the company's operating earnings "fell short."
"We believe Ford's turnaround is continuing, albeit at a slower rate, given the tough spot it's in between GM's price-cutting and the Japanese [manufacturers'] growth," Casesa noted.
Ford shares fell 47 cents, or 3.4 percent, to close at $13.46 in Thursday trading on the New York Stock Exchange. The stock's 52-week range is $12.61 to $16.48.
For the full year, Ford's worldwide automotive sector earned a pretax profit of $850 million, up from $153 million a year ago but short of the company's goal of $1 billion. The gain reflected pricing improvements and lower overhead and engineering costs.
Below expectations
"While this was at the lower end of our target range, it was less than our expectation," Don Leclair, Ford's executive vice president and chief financial officer, said in a conference call. "This was primarily explained by adverse exchange [rates] and higher manufacturing launch and commodity costs."
Ford's financial services sector earned a pretax profit of $1 billion in the quarter, an improvement of $144 million from a year ago. For the full year, excluding special items, Ford's financial services sector reported a record pretax profit of $5 billion, up $1.7 billion over 2003, driven by strong profits at Ford Motor Credit Co. and Hertz Corp.
For all of 2004, Ford earned $3.5 billion, or $1.73 a share, a dramatic increase from a profit of $495 million, or 27 cents a share, in 2003. Full-year revenue for 2004 was $170.8 billion, up $7.2 billion from $163.6 billion last year.
"In 2004, our company gained momentum, delivering more revenue and earnings, more new products and more innovative breakthroughs," chairman and chief executive Bill Ford said in a statement. "We also confronted operation challenges with our Jaguar brand and high industry marketing costs."
Ford incurred a $56 million charge in the fourth quarter related to an ongoing restructuring within its luxury Premier Automotive Group, which includes Volvo, Land Rover, Jaguar and Aston Martin. Led downward by troubled Jaguar, the group's fourth quarter pretax loss was $255 million, compared with a profit of $114 million a year ago.
"Clearly, we're not happy with our results at PAG," Leclair said. "We have a lot of work to do, but our plans are in place and the PAG team is committed to improving."
Ford's fourth-quarter earnings also included a $390 million charge related to Visteon Corp., its former auto parts arm. Ford and Visteon announced agreements in late 2003 aimed at untangling pricing and cost-sharing issues.
The company offered no earnings forecasts, but Bill Ford said "we're going to build on our successes as we launch more new products in 2005 and beyond."
Some analysts have said Ford's U.S. business should get a lift in 2005 from several new vehicles launched in 2004, including the Five Hundred flagship sedan, Mustang muscle car and Escape hybrid SUV.
Ford Motors' top executives are scheduled to disclose 2005 earnings milestones at a meeting Tuesday in New York.
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