By Mike Ramsey And Anne Steele
Ford Motor Co. posted a modest net profit in the fourth quarter
of 2014 and forecast much stronger results for 2015 as it looks to
put a year of U.S. vehicle recalls, Russian economic strife and
South American weakness in the rearview mirror.
Ford managed to exceed analysts' expectations for pretax profits
in the quarter, but net income fell to $52 million, down from $3
billion in the same period a year earlier, and revenue declined
4.5% even as wider industry sales sizzled in the period. Ford Chief
Financial Officer Bob Shanks said 2014 was a "set up" year and "we
are off to the races" in 2015.
Last year was a "challenging year," Mr. Shanks said to reporters
Thursday morning. "We do expect to see a substantial increase in
our wholesales this year. You are going to see revenue go up,
volume go up and market share go up."
The pressure is on Ford to deliver better results this year as
the first six months of the tenure of new Chief Executive Officer
Mark Fields was a struggle. Mr. Fields has called 2015 a
"breakthrough year," but persistent losses in its European
operations continue to present a headache.
A $700 million charge related to removing Venezuela from
consolidated earnings weighed heavily on net income during the
fourth quarter. Currency controls and economic uncertainty are
forcing Ford to change the way it accounts for its financial
performance in Venezuela.
Also, Ford had a sizable one-time tax benefit that bumped up
results in the fourth quarter of 2013, and that wasn't repeated in
2014.
Ford's global revenue declined $1.7 billion in the quarter to
$35.9 billion because of lower vehicle sales around the globe,
including fewer deliveries in a North American market that is at a
near-decade high. Ford has forecast a big turnaround this year as a
number of new vehicles went on the market late in 2014 and promised
to increase sales and revenue. The auto maker experienced a
slowdown late in the year due to a critical production changeover
for the F-150 pickup truck.
Adjusted for one-time costs, including the Venezuelan effort and
costs related to cutting jobs in Asia and Europe, Ford earned 26
cents a share, better than the 23 cent estimate of analysts polled
by Thomas Reuters.
Ford's pretax operating profit for the quarter, excluding
special charges, was $1.1 billion, down from $1.3 billion a year
earlier. For the year, Ford posted a $6.3 billion operating profit
and is maintaining its forecast of pretax operating profits of $8.5
billion to $9.5 billion in 2015.
In North America, traditionally Ford's strongest region, pretax
profits fell to $1.55 billion from $1.8 billion the previous year.
The annual regional profit of $6.9 billion mean union workers in
the U.S. will be paid a profit-sharing bonus of $6,900. Ford didn't
reap much of the benefit of having its Dearborn, Mich., truck plant
back online after shutting it for several weeks in the third
quarter as production still was slow. Car makers book revenue when
cars are built for dealers, not when they are sold to
consumers.
Ford's losses in Europe shrunk to $443 million from $529 million
last year. Ford finished its restructuring last year with the
closing of its Genk, Belgium, plant. Overall, Ford reduced capacity
in the region by 18% and closed three plants, but it isn't
projecting profits in the region in 2015.
South America's losses expanded slightly to $187 million from
$126 million. Asia-Pacific profits fell to $95 million from $109
million. Deliveries in the region rose only slightly. Ford Motor
Credit's profits rose to $408 million from $355 million a year
ago.
Write to Mike Ramsey at michael.ramsey@wsj.com and Anne Steele
at anne.steele@wsj.com
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