Ford profits soar skyward

American sales overshadowed by poor sales in Europe

Record results in North America covered continued losses in Europe and a lukewarm result in South America to power Ford Motor Company to an US$8 billion profit in 2012.

A strong final three months of the year brought the company home with a wet sail, with a fourth quarter pre-tax profit of US$1.7 billion ($2.02 billion) its highest in more than a decade, says industry website, Go Auto.

The full-year figure was down on the US$8.8 billion profit recorded in 2011, but nevertheless marks 14 straight quarters in the black for the Detroit-based car-maker.

The US domestic market was responsible for the lion's share of earnings, with record pre-tax profits of US$8.3 billion and an operating margin of 10.4 per cent reflecting the continued recovery of the US market as a whole post Global Financial Crisis.

Ford president and CEO Alan Mulally said the positive growth showed the company's One Ford plan, highlighted by greater model sharing between diverse markets, was working.

"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," he said.

The company predicts even stronger US pre-tax profits in 2013, citing efforts to slim down its cost structure, better match production with demand and its industry leading roll-out of new-generation model lines.

However, the results were overshadowed by a worse than expected full-year pre-tax loss of US$1.75 billion in Europe, compared to a loss of US$27 million a year earlier.

Ford of Europe's fourth quarter pre-tax operating loss of $732 million widened sharply from a loss of $190 million in 2011.

The European arm experienced substantial decline in both volume (1.35 million, down from 1.6 million in 2011) and annual revenue (down to US$26.6 billion from US$33.8 billion one year earlier).

These figures were compounded by the forecast of a further US$2 billion in losses for 2013 as the company faces up to an "uncertain" business environment and another volume contraction.

Ford said it now expects total European sales volumes to be lower than the 14 million sold in 2012.

- Hamilton News

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