By on January 28, 2011

Ford did not disappoint and today announced its biggest annual profit in a decade. According to a Ford release, the company booked $8.3 billion in pre-tax profits for 2010. That is a $3.8 billion increase from a year ago.

Ford ended 2010 with Automotive gross cash exceeding debt by $1.4 billion, an improvement of $10.1 billion from year end 2009. Ford ended 2010 with $20.5 billion of Automotive gross cash, and a debt of $19.1 billion.

Fourth-quarter net income fell to 5 cents per share from 25 cents per share after a $960 million charge for completing a debt conversion in the third quarter. The fickle stock market did not like that. The F share lost 6.3 percent  in premarket trading. It dragged down GM,which lost 2.1 percent to $37.84 before the bell.

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11 Comments on “Chew On That: Ford Announces $8.3 Billion Profit...”

  • avatar

    Your move Silvy.

  • avatar

    I know they need 10 billion or so to operate… but wouldn’t it be wise to pay off 5-10 billion of the debt? the cash flow by the saved interest alone is immense. and the remaining debt could be re-negotiated to a lower interest rate because the credit rating is better with less debt.
    Paying off debt also would shelter the cash from the unions. I already see half the profit evaporating for new union benefits….

  • avatar

    Ford is up 50% since last summer,  the fickle stock market seems to be rewarding Ford for a job well done.

  • avatar

    Technically Ford did disappoint. Wall Street (I know, the root of all evil) was expecting adjusted EPS of $0.48, Ford did $0.30. Also, the operating loss in Europe is a concern. The stock was down almost 4% in the pre-market. But that’s just the “smart money” –

    Back envelope look at the numbers was operating profit of $1000 per vehicle globally (4.8% op margin). At current global share, every million units to the world total gets Ford $83 mn in operating profit at steady margins. Being the “dumb money”, I’d feel pretty good about Ford longer term and consider a selloff as a “limited-time-only, price rollback” sale.

    My concern would be that except for interest expense, there are not a whole lot of costs to take out of the system presently. So rev and earnings growth has to come from increasing volumes and/or market share grab. Which is mostly fine for the US and BRICs. However, with the ramp in production will come a ramp in related costs. Plus, raw materials should be a concern as will be labor costs as profitability is established – equality of gain and all that. Looks to me like cost structure will never be as lean as it is in this post-carpocolypse window. I worry about business as usual as business returns to usual.

  • avatar

    That’s great for Ford, but they’re certainly not out of the woods anymore than GM or Chrysler is. All the OEMs are fighting for market share in what certainly will be a shrinking market as the world system races to the bottom. I think they’d be doing far better if they re-named the Taurus to the Galaxie 500 as god intended – it certainly looks like it should carry that name. It would sell better, and I may actually entertain the thought of buying one.

    • 0 avatar
      Educator(of teachers)Dan

      But for better or for worse, Ford is being boosted by positive public perception, most normal people think of them as the “American automaker that didn’t go bankrupt.”  IMHO most folks aren’t worried about Ford because they haven’t had to go to the government trough to feed yet.
      FWIW if you enjoy your W-body Impala you might want to test drive a “pre-face lift” Taurus (you know a 500 with a nicer grill) and the 3.5V6/6speed auto combo.  The Taurus is supposed to handle pretty well and it will have more rear seat leg room than your Impala.  (I’m all in favor of bringing back old model names but honestly the Taurus name did have plenty of equity left in it, besides a Galaxie 500 would only be cool in my book with GIANT round taillights. :P)  FYI I was looking at the taillights on a Cobalt coupe the other day and thought “those have to be small enough to fit on an Impala trunk to give the tail three round lights like god intended.”

    • 0 avatar

      Dan: Right you are about the public’s perception of Ford, my friend! That does go a long way. We’ll see what the days ahead will bring.

      As far as the Taurus goes, I did check out the original “500”, and you’re correct about the rear seat room – it was like an SUV! Never drove one, though. Our buddy obbop could live quite comfortably back there with more than enough room for his “Betsy” shotgun! BTW, my favorite Galaxie 500 is the 1965 model, perhaps because a certain gal I used to pursue when out in Ca. in the USAF had one. White with red interior, 2 dr. hardtop. Sweet. Her and the car! Too dumb to win either. Now I’ve really aged myself, but you already knew that!

      Also correct on the Cobalt coupe tail lights. If I had the tools, I’d give serious thought about tyring to kit-bash something on the order of a custom rear panel with three lights on each side, which would make my Imp a real Imp and not a Bel-Air! One never knows. If I find a set of panels for an Imp real cheap, I may play around with it.

    • 0 avatar

      No company, in any industry, ever has been, or ever will be, out of the woods!!!  The competition is always looking to eat your lunch.

    • 0 avatar

      “No company, in any industry, ever has been, or ever will be, out of the woods!!!  The competition is always looking to eat your lunch.”
      Amen to that. Never, EVER rest on your laurels. Keep innovating, keep pushing to be better.

  • avatar

    Could someone explain to me why Ford is down 12 percent?
    That’s it, f%^&k it, I’m BUYING. Shouldda done it when it was 1.50, but at 16.50 it’s not bad of a deal, either.

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