Published — Wednesday 30 January 2013
Last update 4 February 2013 2:07 am
DETROIT: Ford Motor Co. posted better-than-expected fourth-quarter profit and predicted 2013 operating profit will be about equal to its performance last year, as market share gains in the US auto market offset deepening losses in Europe.
The second largest US automaker expects to lose $ 2 billion in Europe, reflecting its deteriorating sales outlook for the region. Previously, Ford said it expected its 2013 loss in the region to be equal to last year’s levels.
But Chief Financial Officer Bob Shanks predicted Ford’s losses in Europe will bottom out this year. The automaker expects to command a higher market share in both the US and China.
In the fourth quarter, Ford reported a per-share pretax operating profit of 31 cents, better than the average analyst estimate of 25 cents per share, according to Thomson Reuters I/B/E/S.
Fourth-quarter revenue totaled $ 36.5 billion, with the lion’s share coming from its North American operations, its most profitable business unit. During what is typically its weakest quarter of the year, Ford reported an operating margin of 8.4 percent in North America.
During the quarter, Ford lost $ 732 million in Europe and reported a $ 1.75 billion loss for 2012, roughly in line with its forecast of a $ 1.5 billion loss or higher.
The wider 2013 loss estimate is also affected by a lower interest rate, which increases the automaker’s pension costs, and a stronger euro. Ford said the European business environment remains uncertain and the company would take further action as necessary.
Ford expects pretax profits in North America will be higher this year than in 2012. The company also expects to break even in Asia, where it is racing to catch up to rivals, and South America.