Ford Q4 earnings beat analyst forecast
Ford Motor said its fourth-quarter earnings beat Wall Street analysts' expectations and reiterated 2016 pre-tax profit forecast to be identical to or greater than the previous year. The company reported fourth quarter earnings per share, excluding special items, of 58 cents, up 28 cents from last year.
Ford earned a pre-tax profit, excluding one-time items, of $2.6 billion in the fourth quarter of 2015. The company's quarterly net income amounted to $1.9 billion. Revenue for the three-month period totalled $40.3 billion
For the full year 2015, pre-tax profit, excluding special items, amounted to $10.8 billion, an increase of $3.5 billion from last year. Annual net income totalled $7.4 billion, up $6.1 billion from the previous year. After-tax earnings per share, excluding one-time items, was $1.93 for the year 2015, an increase of $0.59 from the prior year. The automaker's revenue amounted to $149.6 billion in the full year 2016, a rise of $5.5 billion from 2014.
Ford said that Asia Pacific unit recorded the best-ever profit for the year 2015 and that profit improved in Europe. The company also noted that Ford Credit and North America provided standard results in the year. Annual pre-tax profit from the automotive unit was $8.8 billion, which was $3.3 billion high from last year.
The company's North America division showed robust top line growth for the year 2015, with higher pre-tax income and operating margin of 10.2%. In 2015, revenue was slightly down in Europe division but was up 8% at constant exchange basis. The automaker also announced its plan to invest $4.5 billion within 2020 in electrified solutions.
Despite profit for the full year 2015, shares of the company collapsed over 15% since January 1 during the final trading session on Wednesday since investors began fearing that the auto markets of China and the US will have a slower growth, according to Reuters. Reuters said that analysts, on average, had anticipated pre-tax profit to $11 billion for the year 2016.
Fixed costs and pricing remain headwinds for Ford that sells a robust mix of more sports utilities and profitable trucks, MarketWatch said quoting Dan Galves, an analyst at Credit Suisse.
Bob Shanks, Chief Financial Officer of Ford, said that he is more confident that the US market will remain robust amid a slower growth rate and that the low gasoline price and low-interest rates will fasten the demand for Ford's pickup trucks that are highly profitable.
Earlier in January, Ford's rival General Motors Co increased its 2016 profit, excluding special items, forecast to a range of $5.25 to $5.75 per share. General motors also said that it has formed a team to fasten the growth of electric and self-driving cars.