A $793m loss for the fourth quarter resulted from European restructuring costs and fresh support for former subsidiary Visteon. But for the full year, Ford's worldwide automotive sector earned a pre-tax profit of $104 million in 2003, which marked a $357 million improvement from Ford's loss of $253 million a year ago.
For the fourth quarter, Ford's worldwide automotive operations on their own reported a pre-tax loss of $4 million, a $236 million improvement from a year-ago loss of $240 million. Automotive revenue for full-year 2003 was $138.4 billion, up three per cent from $134.3 billion a year ago. Automotive revenue for the fourth quarter was $39.8 billion, up from $34.6 billion a year ago.
The company reported significant fourth-quarter improvements in operating results for Premier Automotive Group, South America, Ford Europe and Asia Pacific.
"We have dramatically improved our profitability, beaten Wall Street's expectations for eight consecutive quarters, and moved closer to achieving our mid-decade goals," said Chairman and Chief Executive Officer Bill Ford. Company-wide cost reductions totalled $3.2 billion during 2003. Ford's gross cash at December 31st totalled $25.9 billion.
Regional results
Automotive operations in North and South America reported a 2003 pre-tax profit of $1.6 billion, down $236 million from 2002; South American operations reported a 2003 pre-tax loss of $130 million, a $492 million improvement from 2002.
International automotive operations reported a full-year pre-tax loss of $905 million, a $575 million improvement from a 2002 loss of $1,480 million.
Ford Europe's automotive operations reported a pre-tax loss of $1.1 billion for 2003, compared with a loss of $549 million a year ago. The decline was primarily attributed to unfavourable net pricing, adverse mix, unfavourable exchange rates, and a reduction in dealer stocks, partially offset by cost reductions. Full-year revenue totaled $22.2 billion, up from $18.9 billion a year ago.
For the fourth quarter, Ford Europe reported a pre-tax profit of $60 million, an improvement of $77 million from a loss of $17 million a year ago. The improvement primarily reflected lower costs, improved results at Otosan, Ford's joint venture in Turkey, and higher dealer stocks. Restructuring European operations cost Ford $513m in the full year.
Ford's Asia Pacific automotive operations posted a loss of $25 million, an improvement of $151 million from a loss of $176 million in 2002.
Premier Automotive Group reported a pre-tax profit of $164 million for 2003, compared with a loss of $740 million last year. The improvement of $904 million primarily reflected cost reductions and improved mix, partially offset by unfavourable exchange rates. Revenue increased to $24.9 billion from $21.3 billion a year ago.
Ford Credit makes a massive contribution with pre-tax profits up 50%
Ford Motor Credit reported record net income of $1.8 billion in 2003, up $583 million from $1.2 billion a year earlier. On a pre-tax basis from continuing operations, Ford Credit earned $3.0 billion in 2003 compared with $2.0 billion in 2002. The increase in earnings primarily reflected a lower provision for credit losses, the favourable market valuation of derivative instruments and associated exposures, offset partially by the impact of lower average net receivables. On December 31, 2003, receivables on Ford Credit's balance sheet totalled $132 billion, up $6 billion from December 31, 2002.
In the fourth quarter of 2003, Ford Credit's net income was $470 million, up $116 million from $354 million in the same period a year earlier.
Ford's rental subsidiary Hertz reported a full-year 2003 pre-tax profit of $228 million, up from $200 million in 2002. Hertz earned $44 million in the 2003 fourth quarter, up from a year-ago pre-tax profit of $27 million.
Based on continued quality improvements, regional market-share stability or gains, and continued cost reductions, Ford expects full-year 2004 earnings per share of $1.20 to $1.30 from continuing operations, excluding special items, assuming 2004 industry sales of 17 million vehicles in the USA and 16.9 million in Europe.
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