Ford Misses on Europe, Asia Losses

DETROIT (TheStreet) -- Ford(F) missed fourth-quarter estimates as losses in Europe and Asia, combined with reduced profit in South America, outweighed gains in the United States.

The automaker reported fourth-quarter net income of $1.1 billion, or 20 cents a share. Analysts surveyed by Thomson Reuters had estimated 25 cents. Revenue rose 6% to $34.6 billion. Analysts had estimated $32.3 billion.

Including items, Ford reported net income of $13.6 billion, or $3.40 a share. Special items included an accounting change related to releasing $12.4 billion of valuation allowance as well as a one-time gain of $401 million related to the October sale of its Russian operations to the Ford Sollers joint venture. The valuation allowance was implemented in 2006, reflecting Ford's poor performance at the time, but the company said it is no longer necessary today.

During the quarter, Ford reported an automotive pretax operating profit of $586 million, down from $741 million a year earlier, due to higher costs for commodities, compensation and unfavorable exchange rates, partially offset by favorable net pricing, volume and mix.

In North America, Ford reported a fourth-quarter pretax operating profit of $889 million, up from $670 million a year earlier. But in Europe, the company reported a pretax operating loss of $190 million, compared with a loss of $51 million a year earlier, due largely to higher material costs.

In Asia, Ford reported a pretax operating loss of $83 million, compared with a year-earlier profit of $23 million, reflecting the impact of Thailand flooding as well as higher costs. In Latin America, Ford reported a pretax operating profit of $108 million, compared with a profit of $281 million a year earlier, due to unfavorable exchange rates and higher commodity costs.

Looking ahead, Ford said it expects automotive pretax operating profit to improve from 2011. In North America, Ford expects industry volume of 13.5 million to 14.5 million units, including medium and heavy trucks. Capital expenditures for the current year will total $5.5 billion to $6 billion.

This year the company plans to contribute $3.5 billion to worldwide pension plans, including $2 billion to U.S. plans.

"2011 marked a milestone year in our work to strengthen our balance sheet," said Chief Financial Officer Lewis Booth, in a prepared statement. "We increased automotive cash, reduced debt and improved liquidity, clearing the way for us to resume paying a quarterly dividend."

In premarket trading Friday, Ford shares were down 67 cents to $12.12.

-- Written by Ted Reed in Charlotte, N.C.

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