Ford Posts $2.7B Profit for 2009, Raises Projections
By Chris Haak
Proving that its multi-year turnaround plan has clearly taken root, Ford Motor Company reported final 2009 net income of $2.7 billion, including a gain of $868 million for the fourth quarter of 2009. These numbers compare favorably, obviously, to the $14.8 billion loss for 2008 and the $5.9 billion loss for Q4 2008.
Furthermore, Ford CFO Lewis Booth raised the company’s earnings projections for 2010 and 2011. During the middle of 2009, Ford had forecast that it would be “break-even or better” in 2011, and three months ago, raised the 2011 forecast to “solidly profitable.” Now, Booth is forecasting a profitable 2010 as well.
Ford ended 2009 with with $25.5 billion in automotive gross cash and $34.3 billion in automotive debt. The debt load is reduced from prior-year levels thanks to debt restructuring that Ford tackled during 2009, but about double the level that GM has after GM’s “quick rinse” bankruptcy. In comments to reporters, Booth noted that Ford’s balance sheet still needs more work, but he is obviously very much aware of the situation that it puts Ford in relative to its competitors with relatively clean balance sheets.
The company’s automotive units saw improved financial results in 2009 in all of its operating regions, including North America:
- North America had a pre-tax profit of $707 million vs. a loss of $1.9 billion in 2008, thanks to higher sales and increase in transaction prices.
- South America’s had a pre-tax profit of $369 million
- Europe had a pre-tax profit of $305 million vs. a $338 million loss in 2008.
- The Asia, Pacific, Africa unit had a profit of $19 million compared with a loss of $19 million.
- Volvo narrowed its pre-tax operating loss to $32 million from $736 million in 2008. Volvo, of course, is in the process of being sold to China’s Geely.
With the news of ever-more Toyota safety recalls and quality problems, plus the stigma of bankruptcy still hanging over GM and Chrysler, Ford seems to really be in a position to gain marketshare in 2010. Toward that end, Ford is increasing its first quarter production forecast from 550,000 vehicles to 570,000.
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