Ford, Ford Credit Record 2009 Profit

Edward Niedermeyer
by Edward Niedermeyer

The Ford Motor Company [full results in PDF format here] earned net income of $2.7b last year, on pre-tax operating profits of $454m. The company enjoyed a strong fourth quarter with $868m in net income and an after-tax operating profit of $1.6b (excluding special items). Ford Motor Credit [full release in PDF format here] earned $1.3b in net income and $2b in pre-tax operating profit last year. Ford Credit’s receivables were down at the end of 2009 compared to 2008, with $93b receivable compared to $116b at the end of 2008, and leverage of 7.3 to 1.

Ford Motor’s revenue actually fell by about $20b in 2009, but profit was achieved through some $5b in

Automotive structural cost reductions… reflecting primarily lower manufacturing and engineering costs, a reduction in pension and retiree health care expenses, and lower advertising and sales costs as Ford completed major restructuring actions.

But if you break Ford’s operating profit down, it’s clear that the automotive sector still loses money (about $1.4b last year on $3oom cash burn), and relied on about $1.8b in financial services sector profit to clear the $454m operating profit number. Nearly half a billion dollars on an operating basis is still profit, but the core business clearly still has some signs of weakness.

The flip side to this is the fact that Ford closed the year strong with impressive fourth quarter results. The fourth quarter saw huge improvements in revenue ($35.4b) and automotive sector operating results (over $1b) compared to 2009 as a whole.

North American operations saw its revenue rise about $4.5b to $15.8b, on $707m operating profit. South America and Europe had operting gains in the $300m range on revenue improvements of about a billion dollars each. Africa/Asia Pacific continues to be a disappointing sector for Ford, with operating profit of under $20m only modest improvements in revenue. Meanwhile, Volvo got its act together, losing “only” $32m on an operating basis, which compares nicely to 2008’s $736m loss.

Ultimately, Ford ended the year with $25.5 billion of Automotive gross cash and $34.3 billion in Automotive debt. Still,

As a result of Ford’s 2009 U.S. financial performance, the company will pay profit sharing to 43,000 eligible U.S. hourly employees consistent with the 2007 UAW-Ford Collective Bargaining Agreement. The average amount is expected to be approximately $450 per eligible employee. As previously announced, Ford is not awarding salaried employee performance bonuses globally under the company’s bonus plan for 2009 company performance. However, the company did announce that U.S. salaried employees will receive merit increases in 2010, and the company’s 401(k) matching program was reinstated on Jan. 1, 2010.

Edward Niedermeyer
Edward Niedermeyer

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  • Rnc Rnc on Jan 28, 2010

    What exactly shall we see on February 8th?

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    • Rnc Rnc on Jan 29, 2010

      That value was written off (down) long ago (you know taking non-cash charges to offset cash income during the good years for tax purposes) and they did have good years after that purchase. Additionally once they decided to sell they would have been forced to value at what they thought it would sell for (at that time the appocalypse was occuring) and as they were already going to post a multi-billion dollar loss might as well tack the remainder of volvo's value on (for tax purposes as well, DTA), so they can show a gain at sale in future year. (+) all of this less any intangibles transferred to ford (safety and all of that has a value)All the sale will do is add $2 billion to ford's cash position and a slight uptick in one time gains. Now I know how you will look at it (while bragging about what a great deal GM got for Saab:)

  • Littlehulkster Littlehulkster on Jan 28, 2010

    I am Ford, king of kings. Look upon my works, ye mighty, and despair.

  • Carson D At 1:24 AM, the voyage data recorder (VDR) stopped recording the vessel’s system data, but it was able to continue taping audio. At 1:26 AM, the VDR resumed recording vessel system data. Three minutes later, the Dali collided with the bridge. Nothing suspicious at all. Let's go get some booster shots!
  • Darren Mertz Where's the heater control? Where's the Radio control? Where the bloody speedometer?? In a menu I suppose. How safe is that??? Volvo....
  • Lorenzo Are they calling it a K4? That's a mountain in the Himalayas! Stick with names!
  • MaintenanceCosts It's going to have to go downmarket a bit not to step on the Land Cruiser's toes.
  • Lorenzo Since EVs don't come in for oil changes, their owners don't have their tires rotated regularly, something the dealers would have done. That's the biggest reason they need to buy a new set of tires sooner, not that EVs wear out tires appreciably faster.
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