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Ford turns a $2.7 billion profit

Analysts predict further gains for Ford because it is well positioned to take full advantage as the economy recovers. It’s getting a further boost from the recall troubles being suffered by Toyota, a principal competitor.

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Analysts predict further gains for Ford because it is well positioned to take full advantage as the economy recovers. It’s getting a further boost from the recall troubles being suffered by Toyota, a principal competitor.

LOS ANGELES — Ford Motor Co. posted a profit of $2.7 billion for the year, a dramatic turnaround for the company, which weathered one of the worst years in the history of the automotive industry in comparatively good health.

In a conference call Thursday, Ford executives were upbeat about the automaker's future, saying that it should be profitable this year, despite ongoing economic turmoil.

"While we still face significant business environment challenges ahead, 2009 was a pivotal year for Ford and the strongest proof yet" of the success of the company's effort to forge "a path toward profitable growth by working together as one team, leveraging our global scale," said Alan Mulally, Ford's chief executive.

In the United States, sales of Ford brands in the fourth quarter rose 13 percent from the same period a year earlier. The company grabbed 15.3 percent of the U.S. auto market, its first full-year gain since 1995.

Ford's profit, announced before the opening of the stock market, amounted to 86 cents a share and compared with a loss of $14.8 billion, or $6.50 a share, in 2008. Revenue in 2009 fell to $118.3 billion from $138.1 billion, a reflection of lower sales resulting from the global economic slump.

For the quarter, Ford said it earned $868 million, or 25 cents a share, compared with a loss of $6 billion, or $2.51 a share, in the same period a year earlier. Revenue dropped to $29 billion from $34.5 billion.

"The key story going forward is whether Ford can sustain pricing momentum and cost control during an upturn," said Itay Michaeli, an industry analyst with Citigroup Global Markets in New York.

Other analysts believe that is the case.

"If they can make $2.7 billion in one of the worst auto years in history, once sales really start to pick up, Ford should be a good-looking company," said John Wolkonowicz, an analyst at IHS Global Insight in Lexington, Mass.

In addition to an improved vehicle lineup, he said, Ford should benefit from the "hobbling" of rival Toyota from its massive recall and ongoing problems involving faulty floor mats, gas pedal assemblies and unintended vehicle acceleration issues.

That should be good for the company and its workers. In the past month, Ford has announced plans to recall or hire as many as 2,200 employees in next two years.

Already, Ford's financial performance last year triggered a profit-sharing payment to 43,000 eligible U.S. hourly employees that is part of the 2007 United Auto Workers-Ford collective bargaining agreement. The average amount is expected to be about $450 per eligible employee.

The company ended the year with $25.5 billion in cash, more than double what it had a year ago, but it also ended 2009 with $34.3 billion in debt, up $7.4 billion from the end of the third quarter. The increase was a result of Ford borrowing $7 billion to fund a retiree health care trust fund run by the United Auto Workers union.

Other earnings

A wrapup of key earnings data reported Thursday:

• Media General: The newspaper publisher and TV station owner earned $27.4 million, or $1.18 per share, in the three months ended Dec. 27, reversing a loss of $85.5 million a year earlier. In its Florida segment, which includes the Tampa Tribune and WFLA-TV Ch. 8, profits were $6.6 million, compared with a loss of $960,000 in the prior year.

• Microsoft: The top softwaremaker's net income for the fiscal second quarter that ended Dec. 31 rose 60 percent to $6.7 billion, or 74 cents per share. Revenue increased 13 percent to $19 billion.

• The Seattle-based Web retailer earned $384 million, or 85 cents per share, in the quarter, compared with $225 million, or 52 cents per share, in the same period last year.

• Royal Caribbean Cruises: The Miami cruise company earned $3.4 million for the three months that ended Dec. 31, up from $1.5 million a year earlier.

• AT&T: The country's largest telecommunications provider earned $3 billion, or 51 cents per share, in the last three months of the year, up 26 percent from a year earlier.

• Procter & Gamble: The world's largest consumer products maker's earnings fell 7 percent in its fiscal second quarter to $4.66 billion, although sales rose 6 percent.

• Raytheon: The defense contractor reported a fourth-quarter profit of $504 million, up 19 percent from $421 million in the year-ago period.

• Colgate-Palmolive: The maker of Colgate toothpaste, Palmolive dish soap and Ajax cleanser earned $631 million in the fourth quarter, compared with a year-ago profit of $497 million.

• US Airways Group: The airline narrowed its fourth-quarter loss to $79 million from $543 million a year earlier.

Times wires

Ford turns a $2.7 billion profit 01/28/10 [Last modified: Thursday, January 28, 2010 10:49pm]
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