Ford to pay $9000 in profit sharing to UAW workers
Jan 28 2017
The company on Thursday posted $4.6 billion in net income, down almost $2.8 billion from a year earlier.
Net income was $4.6 billion, with an adjusted pre-tax company profit of $10.4 billion.
In Europe, Ford reported a record pretax profit of $1.2 billion for the year, while GM is in the red in Europe. Excluding those items, Ford earned $2.1 billion in the fourth quarter, or $0.30 per share, a 28-cent decline from a year ago and a 1-cent miss from Wall Street estimates of $0.31 a share. Executives blamed the dip on a $3 billion pre-tax pension "remeasurement" or re-evaluation during the last quarter.
It also took a $200 million for canceling a planned Mexico factory criticized by the new USA president. The company said no jobs will be lost because the current Focus plant near Detroit will build a new small pickup and SUV.
Shanks said it was too early to react to the new Trump administration because the company was still awaiting specific policy proposals to evaluate.
"We're watching it very closely", he said.
"Given that we're the largest producer of vehicles here in the USA and a top exporter, that's kind of interesting to us", Fields said of border tax proposals being floated in Washington during a January 10 analysts' conference. Even if Trump makes good on a threat to institute a "border tax" on vehicles imported from Mexico, Fields believes Ford could benefit because it makes so many vehicles in the US, including F-Series pickups, its most profitable model line.
The new president continues to be a large uncertainty for the future of the industry, according to Ford executives. Since that decision, the automaker has worked its way into Trump's good graces and is now looking to parlay that relationship into more lenient regulations and tax breaks that could boost profits. Seventy-two percent of Ford's production volume is in the USA while only 62% of GM's is in the U.S.
Fiat Chrysler Automobiles NV is set to release its earnings Thursday, while General Motors Co.is scheduled for February 7. "By contrast, Ford makes all of their F-series pickup trucks in the USA, and benefits from its pickup truck leadership in Canada - where all of its F-Series sales are imported from US assembly plants".
Ford Motor Company shares rose $0.02 (+0.16%) in premarket trading Thursday. Analysts polled by FactSet expected 31 cents per share.
Revenue for the just-ended quarter fell 4% to $38.7 billion on lower global wholesales, including a USA sales decline of 2% during the period.
The fourth-quarter net loss was Ford's first quarterly red ink since the fourth quarter of 2014.
Ford also sees North America operating margin and profit to be strong this year, albeit still lower than 2016, hurt by an unfavorable product volume and mix.
The announcement came as Ford released its fourth quarter and full year results from 2016. Its Asia Pacific unit reported a $627 million profit, down $138 million from a year ago. It's starting this year with plans to dial back production in North America by about 39,000 vehicles compared with a year earlier, to 815,000 cars and trucks.
Ford's USA sales fell 0.1 percent past year as auto sales dropped and truck and SUV sales rose. Its vehicle brands include Ford, Ford-Lincoln and Lincoln. The employees will get that cash on March 9th.
UAW Vice President Jimmy Settles in a statement said the checks "will provide a substantial benefit to their respective communities across this great country".
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