The Associated Press
DEARBORN, Mich. - Ford, the only U.S. automaker to avoid bankruptcy court, clawed its way to a $2.7 billion profit in 2009 and expects to stay in the black in 2010. It was the automaker’s first annual profit in four years.
Ford’s full-year revenue of $118.3 billion fell nearly 20 percent from 2008, but the Dearborn-based automaker benefited from cost-cutting, a $1.3 billion profit in its credit arm and popular cars and trucks like the Ford Fusion midsize sedan and Ford Escape small SUV. It gained market share in North and South America and Europe, despite the worst U.S. sales climate in 30 years.
“While we still face significant business environment challenges ahead, 2009 was a pivotal year for Ford,” Ford CEO Alan Mulally said in a statement.
Ford shares rose 11 cents, or 1 percent, to $11.66 in morning trading.
Ford’s 2009 net income of 86 cents per share showed a significant improvement from the year before, when it lost a record $14.6 billion. Excluding special items, Ford’s earnings per share for the year were flat.
For the quarter, Ford made 43 cents before special items. That surprised Wall Street, where analysts expected 26 cents per share.
Ford made money in three of the four quarters last year. In the fourth quarter, it earned $868 million, or 25 cents per share, compared with a loss of $5.9 billion a year earlier. Ford’s quarterly revenue of $35.4 billion was up 22 percent from a year earlier.
Ford was able to predict a profit this year because of small signs of economic growth, lower costs and its ability to get higher prices for its vehicles, said Chief Financial Officer Lewis Booth. Previously, Ford had only forecast that it would be “solidly profitable” in 2011.
Fourth-quarter sales in Europe and North America were also stronger than expected, he said.
Still, Booth said signs of economic recovery were tenuous. Ford is expecting U.S. industry sales of 11.5 million to 12.5 million vehicles in 2010, up from 10.4 million last year. But that’s down from sales of 17 million as recently as 2005.
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“We are worried about how fragile that may be,” he said.
The company said it cut manufacturing, engineering, sales and advertising costs by $5.1 billion last year, $500 million of that in the fourth quarter.
Booth did not think his company benefited from a spate of safety-related recalls at Toyota Motor Corp., but said Ford will look for opportunities to improve its market share.
“We’re going to focus on doing it with our own products,” he said.
The company on Thursday joined General Motors Co. in offering incentives to Toyota owners. Ford is offering $1,000 to current Toyota, Lexus, Scion, Honda or Acura drivers who trade in vehicles or have leases expiring by June 30. The trades must be 1995 vehicles or newer.
Ford also has halted production of some full-sized commercial vehicles in China because they contain gas pedals built by the same company behind the accelerators in Toyota’s recent recall.
Ford said it would match or beat last year’s U.S. market share of 15.3 percent, which was up 1.1 percentage points.
The automaker finished the year with $34.3 billion in debt, up $7.4 billion from the end of the third quarter. That was largely due to the company taking on $7 billion in debt it owes a retiree health care trust fund run by the United Auto Workers union. That puts Ford at a disadvantage to GM and Chrysler, which were able to shed debt in bankruptcy court.
Booth said the company has “an uncompetitive balance sheet” and will continue to work on cutting its debt this year. He would not say what steps it would take other than generating enough cash from operations to make payments.
“We’re not kidding ourselves. We know we’ve still got a lot of debt on our balance sheet,” he said.