Ford posts record 2016 profit in Europe
DETROIT -- After posting a fourth-quarter net loss mainly because of accounting changes, Ford Motor finished 2016 with a $10.4 billion pre-tax profit, down slightly from record results in 2015.
Fourth-quarter pre-tax profit was $2.1 billion, down $500 million due to a North American reduction in inventory and unfavorable conditions in the Middle East and Africa, and Asia Pacific. Ford's quarterly net loss was $800 million compared with a $1.9 billion profit a year earlier, the company said in a statement.
Ford took a $3 billion fourth-quarter hit because of the way it accounts for pensions and a $200 million charge for canceling its small car plant in San Luis Potosi, Mexico, a move that followed criticism from then President-elect Donald Trump.
The automaker’s full-year net income of $4.6 billion was down $2.8 billion from 2015. For the full-year, Ford posted an automotive operating margin of 6.7 percent. Its total company revenue of $151.8 billion was up $2.2 billion from a year ago.
“This underscores the substantial progress we are making in expanding our business to be an auto and a mobility company,” CEO Mark Fields said in the statement.
Ford’s 2016 earnings were driven by a strong performance in North America, where it posted a $9 billion pre-tax profit, down $344 million from last year’s record earnings. It posted a 9.7 percent operating margin in the region, driven by strong pricing for some of its most profitable vehicles, including its F-Series trucks and SUVs.
North American pretax profit in the fourth quarter dropped $73 million to $1.96 billion.
Europe profit record
Ford posted a record $1.2 billion pre-tax profit for 2016 in Europe, including a 4.2 percent operating margin. Fourth-quarter pretax profit in the region was $166 million before tax, about $35 million better than the year-earlier quarter.
The automaker's 2016 $627 million pre-tax profit in Asia Pacific was its second-best result there. Asia-Pacific quarterly pretax profit decreased to $284 million, down $160 million.
For the year, the automaker lost $1.1 billion in South America and lost $302 million in the Middle East and Africa.
The automaker’s full-year earnings per share of 30 cents per share was equal to a Wall Street consensus.
Ford’s guidance for 2017 remained unchanged. It expects profits to slip compared with 2016 as it invests in new mobility services.
Bloomberg contributed to this report