Post by ScottR@KTP on Jan 28, 2010 10:49:48 GMT -5
Ford reports $2.7-billion profit in '09 -- first since '05
By BRENT SNAVELY
FREE PRESS BUSINESS WRITER
Ford said today it earned a profit of $2.7 billion, a stunning improvement over its historic, $14.7-billion loss in 2008, especially for a year that saw industry sales drop to their lowest level since 1982.
It also marks the company's first full-year profit since 2005.
Ford, which has been criticized by the UAW for reinstating merit pay and other benefits for its salaried workforce, also said today that it will pay profit sharing to 43,000 eligible U.S. hourly employees.
Ford said it expects the average hourly workers is expected to receive $450 on March 10. The last Ford provided profit sharing to its hourly workers was in 2004 when they received an average of $600.
Ford’s year-end results were helped by a $4.7-billion one-time gain the company booked in the second quarter after it refinanced a portion of its debt. For the year, Ford netted $2.6 billion from special items including the gain from the debt refinancing and other charges.
But even without special one-time items, Ford reported a pretax operating income of $454 million compared with a loss of $6.8 billion in 2008.
“We are delighted,” Ford CFO Lewis Booth told reporters this morning. “We are seeing the benefit of our production ramping back up.”
Ford's results easily beat Wall Street forecasts, who expected Ford to report a loss of 31 cents per share, according to 13 estimates tracked by Thomson One Analytics.
For the October to December period, Ford reported a net income of $868 million, or 25 cents per share compared with a loss of $5.9 billion, or 2.51 per share, for the same period in 2008.
On a pretax operating basis, Ford earned $1.7 billion or 43 cents per compared with a loss of $3.3 billion, or 1.40 per share last year.
Ford’s performance also offers more evidence that its a reorganization plan that began in 2005, and was accelerated by Ford President and CEO Alan Mulally, is gaining momentum.
Ford, the only U.S. automaker that didn’t file for bankruptcy in 2009, gained favor from the public last year for being able to stand on its own.
Ford has closed 14 assembly and parts plants in North America and slashed its hourly workforce in half to just over 50,000 since 2005.
“Clearly, their market share gains in 2009, the surge of the goodwill … and their ability to avoid bankruptcy and government aid are all flowing really nicely into their operating results,” Mark Oline, managing director for Fitch Ratings said in an interview last Friday.
“And probably the more surprising aspect is their ability to manage production and inventories and pricing. All of that obviously starts on the pricing side with good competitive products,” Oline said.
Ford also provided guidance for 2010, and said it expects to earn a profit for the year. Previously, Ford had only said it would be “solidly profitable,” by 2010.
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Booth now says Ford expects the company and its North American division will earn a profit in 2010 and will report a positive cash flow. However, Booth said it will still take until 2011 before the company is "solidly profitable."
Despite the financial improvements, Ford continues to face debt that increased by $6.4 billion during the fourth quarter to $34.3 billion as the company transferred future retiree liabilities to a UAW-managed trust fund.
“We are not kidding ourselves … we still have a huge amount of debt on our balance sheet,” Booth said. “We are still working on that.”
Contact BRENT SNAVELY: 313-222-6512 or bsnavely@freepress.com.
By BRENT SNAVELY
FREE PRESS BUSINESS WRITER
Ford said today it earned a profit of $2.7 billion, a stunning improvement over its historic, $14.7-billion loss in 2008, especially for a year that saw industry sales drop to their lowest level since 1982.
It also marks the company's first full-year profit since 2005.
Ford, which has been criticized by the UAW for reinstating merit pay and other benefits for its salaried workforce, also said today that it will pay profit sharing to 43,000 eligible U.S. hourly employees.
Ford said it expects the average hourly workers is expected to receive $450 on March 10. The last Ford provided profit sharing to its hourly workers was in 2004 when they received an average of $600.
Ford’s year-end results were helped by a $4.7-billion one-time gain the company booked in the second quarter after it refinanced a portion of its debt. For the year, Ford netted $2.6 billion from special items including the gain from the debt refinancing and other charges.
But even without special one-time items, Ford reported a pretax operating income of $454 million compared with a loss of $6.8 billion in 2008.
“We are delighted,” Ford CFO Lewis Booth told reporters this morning. “We are seeing the benefit of our production ramping back up.”
Ford's results easily beat Wall Street forecasts, who expected Ford to report a loss of 31 cents per share, according to 13 estimates tracked by Thomson One Analytics.
For the October to December period, Ford reported a net income of $868 million, or 25 cents per share compared with a loss of $5.9 billion, or 2.51 per share, for the same period in 2008.
On a pretax operating basis, Ford earned $1.7 billion or 43 cents per compared with a loss of $3.3 billion, or 1.40 per share last year.
Ford’s performance also offers more evidence that its a reorganization plan that began in 2005, and was accelerated by Ford President and CEO Alan Mulally, is gaining momentum.
Ford, the only U.S. automaker that didn’t file for bankruptcy in 2009, gained favor from the public last year for being able to stand on its own.
Ford has closed 14 assembly and parts plants in North America and slashed its hourly workforce in half to just over 50,000 since 2005.
“Clearly, their market share gains in 2009, the surge of the goodwill … and their ability to avoid bankruptcy and government aid are all flowing really nicely into their operating results,” Mark Oline, managing director for Fitch Ratings said in an interview last Friday.
“And probably the more surprising aspect is their ability to manage production and inventories and pricing. All of that obviously starts on the pricing side with good competitive products,” Oline said.
Ford also provided guidance for 2010, and said it expects to earn a profit for the year. Previously, Ford had only said it would be “solidly profitable,” by 2010.
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Booth now says Ford expects the company and its North American division will earn a profit in 2010 and will report a positive cash flow. However, Booth said it will still take until 2011 before the company is "solidly profitable."
Despite the financial improvements, Ford continues to face debt that increased by $6.4 billion during the fourth quarter to $34.3 billion as the company transferred future retiree liabilities to a UAW-managed trust fund.
“We are not kidding ourselves … we still have a huge amount of debt on our balance sheet,” Booth said. “We are still working on that.”
Contact BRENT SNAVELY: 313-222-6512 or bsnavely@freepress.com.