UPDATE 2-Ford profit beats estimates; outlook affirmed
DEARBORN, Mich., Jan 28 (Reuters) - Ford Motor Co on Tuesday posted a higher-than-expected quarterly profit as a strong performance in the No. 2 U.S. automaker's core North American market offset losses in Europe and South America.
The company also affirmed the 2014 profit outlook that it presented to investors last month. Ford has described 2014 as a transition year that will test the strength of Chief Executive Officer Alan Mulally's team and the company's restructuring since he took over in 2006.
Ford said last month that the cost of introducing new vehicles and a deteriorating Venezuelan economy would dent its profit this year. The news sent the company's shares to their biggest one-day percentage drop in more than two years.
However, the stock regained ground after Mulally quashed speculation earlier this month that he would leave Ford for the top job at Microsoft Corp. He has emphasized that he remains engaged in the company's day-to-day operations as well as setting long-term strategy.
Shares of Ford were up 2.2 percent at $16.05 in trading before the market opened.
Ford's net income in the fourth quarter rose to $3 billion, or 74 cents a share, compared with almost $1.6 billion, or 40 cents a share, a year earlier.
The results included a $2.1 billion gain from the addition of deferred tax assets to the balance sheet, as well as charges of $311 million for last year's pension buyouts and layoffs in Europe.
Excluding one-time items, Ford earned 31 cents a share, 3 cents more than analysts polled by Thomson Reuters I/B/E/S had expected.
Revenue rose 4 percent to $37.6 billion, above analysts' estimates of $35.17 billion.
In North America, Ford's pretax earnings were $1.7 billion, a decline of $200 million, as vehicle pricing fell. However, the profit was higher than expectations of $1.5 billion by RBC Capital Markets and $1.43 billion by Barclays.
The company reported a wider-than-expected loss of $126 million for South America, compared with a year-earlier profit. Its $571 million loss in Europe, though smaller than the previous year, was still wider than analysts had expected. Earnings in Asia Pacific Africa surged more than 170 percent to $106 million.
For all of 2013, Ford's net profit was $7.2 billion, including charges of $1.6 billion and favorable items of $2.2 billion. The pretax profit of $8.57 billion was the second-highest in the last decade, trailing only 2011's $8.76 billion.
On Tuesday, Ford said it still expected a global profit this year of between $7 billion and $8 billion, with lower auto operating margins.
The company has said 2014 will be the busiest launch year in its 111-year history, including the critical introduction of the redesigned F-150 full-size pickup truck in the fall.
F-150 production will be down for a total of 13 weeks in 2014, 11 weeks at Ford's truck plant in Dearborn and two weeks at its Kansas City, Missouri, plant, to prepare for the new version.
Three of those shutdown weeks at the Dearborn plant will occur in the first quarter, Ford Chief Financial Officer Bob Shanks told reporters.
Ford has reduced the weight of the new truck by using more aluminum than in the current models. The F-150 is the best-selling pickup in North America and is a large profit center for Ford.
The company said its global pension plans were underfunded by $9 billion at the end of 2013, an improvement of $10 billion from the end of 2012 and $1 billion better than it had previously forecast.
Of the $9 billion in underfunded pensions, $6 billion relates to plans the company does not have to contribute to in advance. Shanks said that meant the company would have more cash to invest in its business because Ford only has $3 billion it must fund upfront.
Ford also said that because of its 2013 earnings, it would make record profit-sharing payments of about $8,800 per person to about 47,000 U.S. hourly employees.