DETROIT -- Ford Motor Co. said its pretax operating earnings in the fourth quarter fell 15 percent to $1.1 billion, in part due to widening losses in Europe, as the company posted its third straight annual net profit.
Quarterly automotive profits were hurt by higher commodity costs, rising compensation costs in North America -- including a one-time ratification bonus related to Ford's new contract with the United Auto Workers union -- and unfavorable exchange rates.
The company also lost money in its Asia Pacific Africa region after a year-earlier profit.
Fourth-quarter net income surged to $13.6 billion from $190 million a year earlier and the highest for any fourth quarter ever, aided by a one-time accounting gain. Revenue for the October-December period rose 6 percent to $34.6 billion.
"Despite the continued uncertainty in the external environment, the strength of our North American and Ford Credit operations allows us to continue to invest for future growth," Ford CEO Alan Mulally said in a statement on Friday.
Full-year pretax operating profit rose 6 percent to $8.8 billion. Net income for 2011 tripled to $20.2 billion, the highest figure since 1998, bolstered by a non-cash special item of $12.4 billion. That gain stemmed from eliminating a valuation allowance against deferred tax benefits.
Ford no longer needs the reserve because it expects to be profitable in coming years and be able to use the tax benefits, according to a U.S. filing. The resource was created in 2006 as Ford began reporting losses that would total $30.1 billion through 2008.
Full-year revenues rose 13 percent to $136.3 billion.
In Europe, Ford's pretax operating loss of $190 million for the fourth quarter widened from a loss of $51 million a year earlier as the region's economy suffered amid the ongoing debt crisis.