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Ford shows signs of global strengthening

Old 10/24/13, 12:43 PM
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Ford shows signs of global strengthening

Good report Ford fans!


Ford shows signs of global strengthening
10-23-2013

By Mike Ramsey
DEARBORN, Mich.— Ford Motor Co. showed signs that its operations are strengthening around the globe, generating a record third-quarter operating profit and a 12% jump in revenue, the auto maker reported Thursday.

Ford’s $2.6 billion pretax profit, or 45-cents earnings per share, bested the 38-cents Thomson Reuters average estimate of analysts. Ford’s net income declined 22% to $1.27 billion because of pension and employee-buyout costs. Ford raised its full-year operating profit forecast, its Europe and South America results, its operating margin and China industry volume forecast.

Ford made $1,683 in operating profit per vehicle it delivered in the third quarter. The company now expects to exceed its $8 billion pretax operating profit of 2012 this year.

Ford’s revenues jumped 12% to $36 billion and its pretax operating profit was $2.6 billion, or 45 cents a share, better than the 38-cents estimate compiled by Thomson Reuters. Ford had a total of $581 million in special items, including worker buyout costs and pension buyouts. Ford raised its operating profit forecast, its margin forecast and increased its projections for sales in China, where Ford’s profits are on the rise.

“It’s a really, really great quarter,” said Bob Shanks, Ford’s chief financial officer. “Especially in growth. We think we are starting to see it in Asia-Pacific where more of the top line growth is flowing to the bottom line. Europe is making great progress and clearly get us to a profit by 2015.

“Ford’s efforts to expand in Asia is starting to pay off as Asia-Pacific contributed $126 million in pretax profits. Ford’s operations outside of North America were profitable. Ford has invested nearly $5 billion in plants in China to try to catch up to market leaders. Volkswagen AG and General Motors Co. Sales of its Ford Focus compact and newly imported Ford Edge and Explorer are propelling profits.

Meanwhile, Ford’s North American operations continue to produce big returns. Pretax profits were roughly unchanged at $2.3 billion, helped by strong sales of Fusion sedans and F-series pickup trucks

Europe’s losses decreased to $228 million from $468 million a year earlier. Ford said losses would be lower than $1.8 billion in Europe, an improvement from its earlier forecast. Last quarter Ford closed two plants in England and will close another plant in Genk, Belgium, at the end of 2014 that will reduce its capacity by 18% in the region. Europe’s auto market may have hit bottom and Ford is benefiting from sales of the B-Max compact people mover. It spent $250 million on employee separation costs in the quarter.

“We believe that we have reached a level of stability--whether it is the economy or the automotive industry. It is at the point where we are going to start to see very, very modest growth take hold,” Shanks said of Europe.

Morgan Stanley analyst Adam Jonas speculated in a note to investors that Ford may be able to break even in Europe in 2014, earlier than expected.

“Ford produced a significant and high-quality earnings beat with a confident outlook,” he said.

A move to the black, along with larger profits in China, could mean a big expansion in global profits for Ford, which has relied on North America to float the enterprise for several years.

South America profits rose to $159 million, compared with $9 million a year earlier. Mr. Shanks said that high inflation in several countries in the region is making it difficult to improve. Ford raised its forecast for the year, but still isn’t forecasting strong returns there.

Ford Motor Credit said pretax profits rose to $427 million from $393 million.

Ford’s cash rose $2 billion to $26.1 billion from a year earlier and it generated $2 billion in free cash flow in the quarter. It has a net cash position subtracting debt of $10.3 billion.
http://www.marketwatch.com/story/for...ing-2013-10-24
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