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Ford rolls past forecasts
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January 21, 1999: 2:56 p.m. ET
Beats 4Q estimates by 8 cents a share; sees continued South America losses
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NEW YORK (CNNfn) - Ford Motor Co. said Thursday it earned $1.67 billion, or $1.35 a share, in the fourth quarter excluding charges, exceeding analysts' estimates.
The No. 2 automaker was expected to report before-charges net of $1.27 a diluted share, according to a consensus of analysts surveyed by First Call.
The results for the latest quarter compared with earnings of $1.57 billion, or $1.27 a share, in the final three months of 1997.
"This is our 11th quarter of year-to-year improvement in our earnings," John Devine, Ford's (F) chief financial officer, told CNNfn. "For the auto business, that's a pretty good track record."
Net up despite revenue dip
Including one-time charges, earnings for the latest quarter were $1.04 billion, or 84 cents a share. The charges, previously announced as being $950 million before taxes, cover the costs of layoffs, investments in Kia Motors Co., and the transfer of one plant in Ohio
The earnings improvement came despite a 5 percent decrease in revenue to $37.90 billion. The decrease was due largely to the spinoff of The Associates financial-services unit.
"Our quality is the best it has ever been, we improved our operating efficiency and our products continue to be well received by customers," Ford President Jacques Nasser said.
For all of 1998, Ford posted earned $22.07 billion, or $17.76 a share, which includes a $15.96 billion gain on the sale of The Associates. Excluding one-time factors, earnings rose to $6.57 billion, or $5.30 a share, from $5.99 billion, or $4.86 a share, in 1997. Revenue declined 6 percent to $144.42 billion.
North America bolsters automotive ops
Ford says its 1998 earnings from automotive operations excluding charges were $5.38 billion, up from $4.88 billion in 1997. The bulk of those earnings came from North America, where the company earned $4.98 billion, up from $4.56 billion.
"In 1998, Ford posted its best retail sales in the United States in 20 years, and all-time U.S. sales records at Ford Division and Jaguar," Nasser said. "Our outlook for 1999 is for another strong U.S. market."
Offsetting the North American gains were losses in South American automotive operations, particularly in financially troubled Brazil. Ford said its loss before charges for the year was $145 million, compared with earnings of $40 million in 1997.
"We'll probably continue to lose money, primarily because the industry is going to be weaker this year than last year," Devine told CNNfn. "We don't think the economy has bottomed out yet."
The company added slightly to its European automotive operation profits, despite a decline in earnings before charges in the fourth quarter. For the year, Ford's European automotive unit earned $330 million before charges, up from $313 million in 1997.
"We are determined to improve our results in Europe by continuing to lower our costs, improve our quality and grow the business with new vehicles such as the Ford Focus," Nasser said.
Record profit-sharing
The overall 1998 earnings will allow Ford to distribute record average profit-sharing checks for 1998 of $6,100 each to about 160,000 salaried and hourly employees in the United States.
While some analysts are concerned about whether Ford is sacrificing market share to improve the bottom line, CFO Devine seemed to indicate that earnings are job #1.
"The No. 1 important milestone for us is continued earnings momentum," he said. "We've had 11 quarters of improvement, we want to make it 12 and then worry about 13 and 14 and so on."
Ford's results came a day after General Motors (GM) posted a record fourth-quarter, earning $1.8 billion, or $3.25 a diluted share.
Ford stock was down 2-1/4 to 62-7/16 in Thursday afternoon trading. 
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