DEARBORN, Mich. – The Ford Motor Company on Friday said its profit fell by almost half in the first quarter, as higher taxes and a loss in Europe overshadowed improvements in its North American business. þþþFord reported net income of $1.4 billion, 45 percent less than the $2.55 billion it earned in the same period of 2011. Revenue declined 2 percent, to $32.4 billion. þþOfficials attributed about half of the decline to the company’s tax rate quadrupling from a year ago. In addition, its European business swung to a $149 million pretax operating loss from a $293 million operating profit. þþExcluding taxes and special items, Ford earned $2.29 billion, or 39 cents a share, marking its 11th consecutive quarterly operating profit. That is 19 percent less than a year ago, when it earned $2.84 billion, or 47 cents a share, but higher than Wall Street’s consensus estimate of 35 cents. þþ“Our team delivered a solid performance during the first quarter, with particularly strong results in North America, despite a challenging global external environment,” Ford’s chief executive, Alan R. Mulally, said in a statement. “We remain focused on investing for future growth and developing outstanding products with segment-leading quality, fuel-efficiency, safety, smart design and value.” þþFord earned $2.13 billion in North America, up from $1.84 billion in the first quarter of 2011. The company said that was the highest quarterly profit for the region since at least 2000, when it began reporting North American results separately. þþThe improvement was a result of higher sales and prices paid by customers, even as increasing gasoline prices prompted a shift toward smaller vehicles. þþThe automaker also recorded positive automotive operating-related cash flow for the eighth consecutive quarter, increasing cash reserves to $23 billion from $21.3 billion a year ago. þþFor the full year, Ford said it expects operating profits and margins in North America to be “significantly higher” than in 2011, allowing global operating profits to be roughly flat. It said operating profits would be higher in the second half than in the first half due to more new product introductions and production increases. þþSeparately, Ford said it would begin offering the option for 90,000 salaried retirees and former employees in the United States to take a lump-sum pension payment, in order to decrease the liabilities of its underfunded pension plans. The payments, which will vary based on an individual’s age, years of service and earnings history, are designed to save the pension plans more money in the future than they would pay out now. Ford will begin making the offers in July and roll them out over the course of a year. þþ“This is the first time a program of this type and magnitude has been offered by a U.S. company for ongoing pension plans,” Ford said in its statement. þþFord’s global pension plans had $74 billion in liabilities at the end of 2011 but were underfunded by $15.4 billion. þ
Source: NY Times
