Ford To Issue Record-Breaking Profit-Sharing Checks
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DETROIT (WWJ) - A record year for Ford means record profit-sharing of $8,800 for the company’s 47,000 eligible workers.
The company posted a net income of $7.2 billion in 2013, helped by earnings of $3 billion in the fourth quarter. That includes special tax items totaling $2.1 billion.
“We had an outstanding year in 2013, demonstrating that our One Ford plan continues to drive solid results and profitable growth for all,” said Alan Mulally, Ford President and CEO. “We are well positioned for another solid year in 2014, as we continue our plan to serve customers in all markets with a full family of vehicles.”
The profit-sharing number is based on Ford’s North American earnings of nearly $8.8 billion for the year. That’s the most that Ford has earned in its home market since they started reporting North American earnings separately in 2000.
“It was an outstanding year,” said Ford Chief Financial Officer Bob Shanks. “We had really great results. We had top line growth, both in term of revenues and wholesales.”
Ford saw its sales and market share grow in 2013.
“We did very, very well in the super segment vehicles,” said Shanks. “Those are the small cars, the medium cars, Fusion and the small utilities, like the Escape. It actually helped us on the coasts in terms of improving our share.”
The earnings exceeded analyst expectations.
“Ford, especially the Ford brand, has been on a lengthy roll, and it’s high-volume vehicles remain strong in the market,” said Kelley Blue Book analyst Jack Nerad. “For 2014 it is important that Ford executes a successful wind-down of current F-150 and make a successful launch of its successor. Mid-cycle renewals of other products are also important, and Ford has a chance to add volume with the all-new version of Mustang.”
Ford’s European operations remain an issue, losing $1.6 billion for the year. But, Ford points out the $571 million loss in the fourth quarter was a $161 million improvement from the fourth quarter of 2012. Ford says it remains committed to breaking even in Europe by mid decade.
The company saw its investments in China starting to pay off, with a $415 million profit in its Asia-Pacific-Africa segment. That compares to a loss last year.
Ford continues to have issues in South America, with a $34 million loss, compared to a slight profit last year.
Ford expects its earnings to be slightly less next year, in the $7-8 million range. This is the same guidance given by the company in a December update, and reflects the cost of launching 23 new products globally—16 in North America—and what Ford calls “slightly unfavorable pricing.”
“It’s very much a building block year, a next step forward,” said Shanks. “We’ve had a really great run over the last five years. We’re making a lot of investments, making a lot of launching of new products around the world. I think that’s going to set us up for a nice improvement in terms of growth.”