MICHIGAN (Bloomberg) – Ford Motor Co. said fourth-quarter profit fell 79 percent as its European operations reported a loss.
Net income fell to $190 million, or 5 cents a share, from $886 million, or 25 cents, a year earlier, Ford said Friday in a statement.
Profit excluding some items was 30 cents a share, trailing the 48-cent average estimate of 14 analysts surveyed by Bloomberg.
Ford's European operations reported a $51 million loss, missing the company's expectations because of lower market share and higher costs. Ford reported a $253 million profit from the region a year earlier.
The automaker's European sales in December dropped 23 percent as other manufacturers offered rebates to lure buyers. The European market “was incredibly competitive in the fourth quarter,” CFO Lewis Booth told reporters in Dearborn on Friday.
“We're not going to chase share. In Europe, we were able to hold the line on net pricing. We continue to worry about the margins of the business and not just chase volume.”
The company also took a $960 million charge in the quarter because of a plan to pay investors in its convertible debt to swap their notes for shares. Sales were $32.5 billion, topping the $28.5 billion average estimate of 10 analysts.
For all of 2010, Ford earned $6.56 billion, CEO Alan Mulally's second straight profitable year. Mulally, 65, improved the automaker's quality ratings and expanded the lineup with models like the Fiesta subcompact.
Ford said profit-sharing checks for its 40,600 U.S. hourly workers will average $5,000, the highest since 2000.
Buyers of Ford cars and trucks in the U.S. paid an average of $30,313 for the company's models last year, up 19 percent from 2002 and the first time Ford vehicles topped $30,000, according to auto researcher Edmunds.com. Ford's U.S. market share rose for the last two years, the first consecutive gains since 1992 to 1993.
“For Ford, 2010 was a pivotal year,” said Jessica Caldwell, director of pricing and industry analysis for Edmunds, which is based in Santa Monica, California. “Now they need to continue to refresh their product line.”