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Last Update: 29-Jan-13 07:50 ET
Ford shares fall 2% despite better than expected earnings
Ford Motor (F $13.47 -0.32) reported fourth quarter earnings of $0.31 per share, excluding non-recurring items, $0.05 better than the Capital IQ consensus of $0.26, while revenues from auto sector rose 5.8% year/year to $34.5 billion versus the $32.88 bln consensus. For 2013 outlook, Ford expects another strong year, with Total co operating profit to be about equal to 2012, Automotive operating margin to be about equal to or lower than 2012, and Automotive operating-related cash flow to be higher than 2012. In Q4, total co production was about 1.5 million units, 125,000 units higher than a year ago. This is 13,000 units higher than Ford's most recent guidance. For the full year, Ford produced 5.7 million units, up 54,000 from a year ago. The co expects first quarter production to be about 1.6 million units, up 160,000 units from a year ago, reflecting higher volume in all regions except Europe. Compared with the fourth quarter, first quarter production is up 72,000 units. North America: The increase of $1 billion in pre-tax profit for the fourth quarter compared with a year ago and the substantial increase in operating margin primarily reflected favorable market factors and the non-repeat of ratification bonuses. For the full year, North America pre-tax profit and operating margin were both records. Volume and revenue were also higher. For 2013, Ford expects the strong North America performance to continue with pre-tax profits expected to be higher than 2012, with an operating margin of about 10 percent. This reflects a growing industry, a strong Ford brand, an outstanding product line-up driven by industry-leading refresh rates, continued discipline in matching production with demand, and a lean cost structure. Europe: Since providing guidance in October, Ford's outlook for industry volume has deteriorated. Ford now expects industry volume to be in the lower end of the range of 13 million to 14 million units. In addition, Ford is being adversely impacted by higher pension costs due to lower discount rates, and a stronger euro. As a result, Ford now expects full year 2013 results for Ford Europe to be a loss of about $2 billion, compared to prior guidance of a loss about equal to 2012. The business environment remains uncertain, and Ford will continue to monitor the situation in Europe and take further action as necessary.
