Ford Profits As Toyota Sinks

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Toyota’s (TM) reputation in the US is in the process of being destroyed due to safety concerns about its most popular models which have caused recalls and a production hiatus in some plants.

Ford (F), which many analysts think will pick up many Toyota customers, made its case again to be the premiere car company in America based on product leadership and sales results.

Net income for the fourth quarter was $868 million, or 25 cents per share, a $6.8 billion improvement over a year ago.  Excluding special items, Ford posted pre-tax operating profits totaling $1.8 billion during the fourth quarter, a $5.5 billion improvement from a year ago.

Ford North America operations posted a pre-tax operating profit in the fourth quarter, excluding special items, of $707 million, its second straight profitable quarter.  Ford South America, Ford Europe and Ford Asia Pacific Africa also posted pre-tax operating profits in the fourth quarter.

For the fourth quarter, Ford Europe reported a pre-tax operating profit of $305 million, compared with a loss of $338 million a year ago.  The improvement was resulted mostly from  lower material costs, higher volumes, favorable net pricing, and structural cost reductions, offset partly by unfavorable product mix.

Ford Asia Pacific Africa reported a pre-tax operating profit of $19 million, compared with a loss of $208 million a year ago. The improvement reflects primarily favorable net pricing, China joint venture profits and structural cost reductions. Fourth quarter revenue was $1.6 billion, up from $1.4 billion a year ago.

Ford finished 2009 with $25.5 billion in Automotive gross cash, compared with $23.8 billion at the end of the third quarter of 2009.  Automotive operating-related cash flow was $3.1 billion positive during the fourth quarter.

Douglas A. McIntyre