DEARBORN, Mich. — Ford Motor Co. is the most profitable it has been in a decade, since the days when Americans were snapping up sport utility vehicles. But maintaining that momentum — and meeting the high expectations of buyers, workers and investors — will be a big challenge in the coming year.
Ford got a taste of that Friday, when its shares fell more than 13 percent to $16.27 after the company failed to meet Wall Street expectations, even after it reported a $6.6 billion profit for 2010.
It also disappointed investors with an 80 percent drop in fourth-quarter profit, missing forecasts and ending two years of better-than-expected results.
It was clear Ford won't have much room for error as it tackles nagging problems, from the huge loans it took to fund its turnaround to its upcoming labor talks to its stodgy, slow-selling Lincoln brand.
"When a company consistently beats expectations, analysts and investors start pushing. They raise the bar to the extent that eventually they're going to miss it," Standard and Poor's analyst Efraim Levy said.
Ford's $6.6 billion profit in 2010 was more than double the $2.7 billion it made in 2009 and was the most it has made since 1999, when it earned $7.2 billion.
But excluding charges from debt reduction and other items, Ford earned $1.91 per shared last year, below the $2.05 analysts expected.
By any measure, Ford has made big improvements since chief executive and president Alan Mulally joined the company in 2006. Using a $23.5 billion loan it got from mortgaging its factories and other assets, Ford sold or shuttered five of its seven brands, closed or sold a quarter of its plants and cut its global work force by more than a third. It also slashed labor and health care costs, plowing the money back into the design of some well-received new products like the Ford Fusion sedan and Ford Edge crossover.
As a result, a leaner Ford was in a good position to scoop up U.S. market share.
Ford's U.S. sales jumped 20 percent in 2010, double the rate of the rest of the industry. The Ford brand was the top-selling brand in the U.S. last year, besting Chevrolet and Toyota for the first time since 2003.
Ford wants to hang onto those gains, but that won't be easy. Ford heads into 2011 with two fewer brands than it had in 2010, after selling Volvo and closing Mercury.
Another potential drain on Ford's income could be the United Auto Workers union, which negotiates a new contract this fall. With an eye on Ford's healthy profits, workers may demand that the company give back some recent wage cuts.