Automaker Ford Motor Co. (F) on Thursday reported a profit for the fourth quarter that plunged from last year, reflecting lower revenues and one-time charges, while the prior-year quarter's results were boosted by a tax benefit.
However, adjusted earnings per share for the quarter beat analysts' estimates. Looking ahead, Ford reaffirmed its pre-tax profit guidance for fiscal 2015.
Net income attributable to Ford for the fourth quarter was $52 million or $0.01 per share, down sharply from $3.07 billion or $0.75 per share in the year-ago period.
Net income included pre-tax special item charges of $1.2 billion. This primarily reflects a one-time accounting change for Ford's Venezuela operations, separation-related actions in Europe and Asia Pacific, and charges associated with the settlement of the 2016 convertible notes. The prior-year quarter's results included a favorable $2.1 billion tax special item.
Excluding special items, adjusted earnings per share for the latest quarter were $0.26, compared to $0.32 in the same period last year.
On average, 18 analysts polled by Thomson Reuters expected the company to report earnings of $0.23 per share for the quarter. Analysts' estimates typically exclude one-time items.
Revenue for the quarter declined 2 percent to $35.9 billion from $37.6 billion in the prior year. Analysts had a consensus revenue estimate of $34.54 billion.
Total automotive wholesale volume also declined 2 percent from a year ago to 1.58 million units, primarily due to North America. While the revenue decline reflects all business units, about half of the revenue decline is attributable to unfavorable exchange.
During the quarter, Ford recorded higher market share in South America and Europe, while its market share declined in North America and Asia.
The company's operating margin for the quarter was 2.8 percent, down 0.4 percent points from the year-ago period.
In North America, revenue declined 5 percent from the year-ago period to $20.9 billion, and wholesale volume decreased 6 percent. North America's pre-tax profit declined 14 percent to $1.55 billion and reflects the impact of new products launched in the quarter.
Revenues for the quarter also declined in Europe, Asia, South America and Middle East & Africa.
For fiscal 2014, net income attributable to Ford declined to $3.19 billion or $0.80 per share from $7.18 billion or $1.77 per share last year. Excluding special items, adjusted earnings were $1.16 per share, compared to $1.63 per share in the previous year.
Revenue for the year declined 2 percent to $144.1 billion from $146.9 billion in the prior year.
Street expected the company to earn $1.11 per share for the year on $136.82 billion in revenues.
Ford's wholesale volume for the year declined slightly from last year to 6.32 million units.
Looking ahead to 2015, Ford affirmed its outlook for pre-tax profit, excluding special items, in a range of $8.5 billion to $9.5 billion. In 2015, Ford expects to realize the benefits of its global product investment and growth strategies, and will continue its product push with 15 global vehicle launches.
Analysts expect the company to report earnings of $1.61 per share for the year.
For projects higher automotive revenue and operating margin in 2015 compared with 2014, and an improved outlook for automotive operating-related cash flow from positive to higher than 2014.
Meanwhile, Ford Motor Credit Co. (FCZ) reported a pre-tax profit for the fourth quarter of $423 million, up from $368 million in the prior-year period. The improved results were due to higher volume and favorable market valuation adjustments to derivatives, partially offset by lower financing margin.
Ford Credit's net income for the quarter declined to $411 million from $568 million in the previous year, primarily driven by non-recurrence of favorable tax items recorded in the year-ago period.
For 2015, Ford Credit affirmed its outlook for pre-tax profit to be about equal to or higher than 2014.
F is currently trading at $14.38, down $0.08 or 0.55 percent on a volume of 1.55 million shares.
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