DETROIT (Reuters) - Ford Motor Co. on Thursday reported a quarterly
profit, reversing a year-earlier loss, as earnings from its finance arm
offset weak automotive operations.
The No. 2 U.S. automaker said fourth-quarter net income was $104
million, or 6 cents a share, compared with a year-earlier loss of $793
million, or 43 cents a share.
Ford took a charge of $390 million in the quarter to write down a
receivable from its former parts unit, Visteon Corp. The charge relates
to reimbursements that Ford receives from Visteon for providing
health-care benefits and life insurance to Ford hourly employees
assigned to Visteon.
Excluding special charges totaling $491 million after taxes, Ford earned
$555 million, or 28 cents a share, in the quarter. Wall Street analysts'
average forecast was 27 cents, according to Reuters Estimates.
Sales fell to $44.72 billion from $45.87 billion a year earlier.
The automaker continued to lose market share in the United States.
Ford's U.S. light vehicle sales fell 4.9 percent in 2004 and it ended
the year with a market share of 18.3 percent, its lowest level in more
than three decades.
Ford's automotive unit had a pre-tax loss of $470 million in the fourth
quarter, compared with a pre-tax profit of $13 million a year earlier.
Ford Credit, on the other hand, posted earnings of $543 million, up from
$470 million a year earlier.
Earnings for both Ford and General Motors Corp., which reported lower
profits on Wednesday, show how much the two Detroit auto giants rely on
their lending arms while they cut costs amid intense competition. More
than three-fourths of GM's 2004 profit came from its lending operations.
Ford's core North American automotive operations lost $470 million
before taxes in the fourth quarter, compared with a pre-tax profit of
$205 million a year earlier, primarily due to lower vehicle volumes.
Automotive operations are key to Ford's future profitability, especially
to achieving its annual pretax earnings target of $7 billion by 2006.
Ford made $5.81 billion before taxes and special items in 2004.
Ford Europe and Premier Automotive Group, which includes money-losing
Jaguar, posted a pre-tax loss of $324 million in the fourth quarter,
down from a profit of $176 million a year earlier. The deterioration was
due to lower production volumes and the weaker U.S. dollar, the
Ford is to more details on its financial outlook for 2005 next week.
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