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Drew Dowdell

Ford posts full year profit for 2009

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FORD POSTS FULL YEAR PROFIT FOR 2009;

FOURTH QUARTER 2009 NET INCOME OF $868 MILLION;

PLANS TO BE PROFITABLE IN 2010+

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  • Full year net income of $2.7 billion, or 86 cents per share, a $17.5 billion improvement from a year ago. Pre-tax operating profits of $454 million, a $7.3 billion improvement from a year ago++
  • Fourth quarter net income of $868 million, or 25 cents per share, a $6.8 billion improvement from a year ago. Pre-tax operating profits of $1.8 billion, a $5.5 billion improvement from a year ago++
  • Ford North America fourth quarter pre-tax operating profits of $707 million, a $2.6 billion improvement from a year ago++
  • Reduced Automotive structural costs by $500 million compared with the fourth quarter 2008, bringing the total 2009 reduction to $5.1 billion, exceeding the target of about $4 billion
  • Strong products drove full year market share gains in North America, South America and Europe as well as continued improvements in transaction prices and margins
  • Ended the year with $25.5 billion of Automotive gross cash and $34.3 billion in Automotive debt
  • Achieved positive Automotive operating-related cash flow of $3.1 billion for the fourth quarter. Full year Automotive operating-related cash outflow was $300 million, a $19.2 billion improvement over 2008
  • Ford Credit fourth quarter pre-tax operating profits of $696 million, a $1.1 billion improvement from a year ago
  • For full year 2010, Ford plans to be profitable on a pre-tax basis excluding special items, for North America, total Automotive and total company, with positive Automotive operating-related cash flow, based on its assumptions

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Ford posts 4Q profit, forecasts operating profit for 2010

Jamie LaReau

Automotive News -- January 28, 2010 - 12:01 am ET

UPDATED: 1/28/10 7:59 a.m. ET

DETROIT -- Ford Motor Co. posted a fourth-quarter profit today and swung to a profit for 2009 with the help of accounting gains while forecasting an operating profit for this year.

The results showed continued progress in CEO Alan Mulally's recovery efforts in the face of the weakest U.S. sales in 27 years. Ford was the only large U.S. automaker not to reorganize under a U.S. government-supported bankruptcy in 2009.

“While we still face significant business environment challenges ahead, 2009 was a pivotal year for Ford and the strongest proof yet that our One Ford plan is working and that we are forging a path toward profitable growth by working together as one team, leveraging our global scale,” Mulally said in a statement.

Ford reported fourth-quarter net income of $868 million compared with a loss of $5.9 billion a year earlier. Ford snapped a three-year streak of losses by recording a net profit of $2.7 billion for 2009 compared with a loss of $14.8 billion in 2008. Last year's results were aided by large gains from debt-reduction efforts and other items.

Ford's operating profit, after taxes, for the fourth quarter was $1.6 billion compared with a loss of $3.3 billion a year ago. For the year, Ford's operating profit was $8 million compared with a loss of $7.3 billion a year earlier.

Ford finished the year with $25.5 billion in automotive gross cash and $34.3 billion in automotive debt.

"We're going to be profitable in 2010,'' said CFO Lewis Booth, issuing the automaker's first forecast for the year. Three months ago, Ford changed its 2011 outlook to “solidly profitable” from “break-even or better.”

Booth reiterated the “solidly profitable” plan today.

Ford posted losses totaling $30 billion from 2006 through 2008, including a record $14.7 billion net loss in 2008.

Ford is also raising production in the first quarter in North America by 20,000 units to 570,000 units from previously announced 550,000 units.

Booth's caution

Booth told reporters today that Ford's 2009 profit was largely influenced by debt restructuring. Ford also cut its automotive structural costs by $500 million in the fourth quarter and by $5.1 billion for the year, surpassing its full-year goal of $4 billion. That was driven largely by lower manufacturing and engineering costs as well as job cuts.

“We're encouraged by our cash position,” Booth said. “We are also seeing the benefit of our production being ramped up again.”

Booth said Ford faces the challenge this year of keeping inventory levels flat, while increasing production in the United States. Ford brands now have about a 60-day supply, considered the industry norm.

“We have an uncompetitive balance sheet,” Booth said. “The most important thing is to return the business to fundamental health and pay down our debt.”

Ford's results come as rival Toyota Motor Corp. is mired in a crisis over faulty accelerator pedals that have led to a massive recall of top-selling vehicles and the temporary suspension of production and sales.

Ford shares have reflected a surge in investor expectations. The stock has jumped nearly six-fold in a year from under $2 to $11.55 on Wednesday.

3Q surprise

In the third quarter, Ford posted a $1 billion profit that surprised Wall Street analysts. The company's $1.1 pre-tax operating profit was its first on that basis since the first quarter of 2008.

With Ford's product development plans on track, the main uncertainties surround whether the U.S. economy and auto sales will show a gradual recovery and how quickly Ford can address its heavy debt load, analysts say.

The automaker borrowed more than $23 billion in late 2006, two months after Mulally joined Ford from Boeing Co., to finance restructuring plans in what the CEO often refers to as Ford's “home improvement loan.”

Ford's turnaround plan includes a commitment to cars in North America, where it plans to begin building a Fiesta small car and global Focus compact this year. Ford also plans to build a new version of its Explorer SUV.

Ford's U.S. sales fell 15.4 percent in 2009, less than the U.S. auto industry drop of 21 percent, to 10.4 million vehicles, the lowest total since 1981. Ford gained 1 percentage point of U.S. market share to 15.5 percent, its first advance in its home market since 1995.

“If there is any kind of recovery, they should be profitable in 2010,” Autoconomy analyst Erich Merkle said before today's results were released. “I think Ford is looking to under-promise and over-deliver.”

Reuters contributed to this report.

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100128/OEM/100129865/1231##ixzz0dud2j32S

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You have to hand it to Mulally and everyone at Ford, they have really come into their own over the last year, I just hope GM can pull off the same, way to go Ford.

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It's very impressive what Ford has been able to do. A Couple years ago we all thought Ford was the one who had the best chance of going under, now look at them. Impressive products on the market with more to come, and high quality and customer satisfaction ratings, without the government bailout and bankruptcy.

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I like a lot of Ford products. Don't let my dad hear me say that.

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