Ford Posts Net Income of $5.7 Billion for 2012
Ford Motor Co. posted a full-year, pre-tax profit of $8 billion and net income of $5.7 billion. The automaker said these profits are due to the strength of record sales results from North America and “solid performance” from Ford Credit.
Ford Motor Co. posted a full-year, pre-tax profit of $8 billion and net income of $5.7 billion. The automaker said these profits are due to the strength of record sales results from North America and “solid performance” from Ford Credit. Ford said it ended 2012 with automotive business segment gross cash of $24.3 billion, exceeding its debt by $10 billion, and a liquidity position of $34.5 billion, which is an increase of $2.1 billion over 2011. Ford said that pre-tax profits and operating margins in North America were both records, and that volume and revenue were higher.
In 2013, Ford said expects strong performance in North America to continue, and that pre-tax profits will be higher than 2012, with an operating margin of roughly 10%. Europe continues to be a challenge for the company, with Ford saying that it will incur higher costs associated with necessary restructuring in the region. For 2013, Ford Europe expects a loss of $2 billion compared, similar to its losses in 2012. That said, Ford expects breakeven results in 2013 in South America and its Asia Pacific region.
Production-wise, in 2012, Ford said it produced a total of 5.7 million units, which is up 54,000 from a year ago. The automaker said it expects first-quarter 2013 production to be about 1.6 million units, which is up 160,000 units from a year ago, which reflects higher volumes in all regions save for Europe. Compared with the fourth quarter of 2012, first quarter production is up 72,000 units.
Ford said that due to its financial performance, it plans to make profit sharing payments to approximately 45,800 eligible U.S. hourly employees on March 14, 2013. As part of the collective bargaining agreement that Ford has with its United Auto Workers employees, the automaker’s pre-tax profits of $8.3 billion results in profit sharing of approximately $8,300 per eligible employee, which will vary based on an employee’s compensated hours, according to Ford.
In addition to profit sharing, the automaker said it made $3.4 billion in cash contributions in 2012 to its worldwide funded pension plans in order to de-risk its pension obligations. This amount is $2.3 billion more than in 2011. In 2012, Ford settled $1.2 billion of its pension obligations as part of its voluntary lump sum payout program for salaried retirees. This program began in the second half of 2012 and Ford said will continue through 2013. Ford said it expects to contribute $5 billion in cash contributions to its pension obligations globally in 2013.
“The Ford team delivered strong results once again, underscoring that our One Ford plan is working,” said Alan Mulally, Ford president and CEO. “We are well positioned for another strong year in 2013, as we continue our plan to serve customers in all markets around the world with a full family of vehicles — small, medium and large; cars, utilities and trucks — with the very best quality, fuel efficiency, safety, smart design and value.”
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