Ford rebounded strongly in '93

February 10, 1994|By New York Times News Service

DEARBORN, Mich. -- Underscoring the domestic automotive industry's recovery, Ford Motor Co. yesterday reported the biggest year-to-year financial turnaround in its history, posting a profit of $2.5 billion for 1993.

The rebound, driven by Ford's growing auto sales in the United States and its record profits from financial services, represented more than a $3 billion swing from its 1992 loss of $502 million, excluding one-time gains and charges. Revenue grew 8.4 percent in 1993, to $108.5 billion.

For the fourth quarter, Ford earned $719 million, or $1.30 a share, helped by a one-time $73 million gain from the sale of its automotive seat business.

That compared with a loss of $840 million, or $1.85 a share, in the corresponding period a year earlier -- a loss exacerbated by a $419 million restructuring charge for Ford's European operations.

The results were in line with expectations of the more optimistic Wall Street auto analysts. But in active trading on the New York Stock Exchange, Ford shares closed at $68.50, down $1.

"It wasn't the blowout that Chrysler had," said Harvey Heinbach, an automotive analyst at Merrill Lynch.

Three weeks ago, Chrysler Corp. reported record fourth-quarter earnings of $777 million, much higher than expectations. General Motors Corp. is expected to report a fourth-quarter profit today.

For the third consecutive year, Ford's financial services operations posted record earnings. The profit was $1.6 billion, compared with $1.04 billion in 1992, excluding one-time charges.

Since 1990, Ford has made more money from financial services, principally automobile loans to consumers and dealers, than from making cars and trucks.

Ford, the No. 2 automaker, sold more than 4 million cars and trucks in the United States and Canada last year, up 13 percent from 1992.

The company paid overtime at many of its plants to meet demand for products like the Ford Taurus sedan and Explorer sport utility vehicle, and it continued the steady gain in market share that it began 10 years ago, picking up eight-tenths of a percentage point, to close the year with 25.5 percent of the U.S. car and light truck market.

As demand rose, Ford was able to reduce cash rebates and other incentives on its vehicles, although not by as much as some analysts had expected.

Partly because of the incentive figures, Ford's per-vehicle profitability in the United States continued to lag behind Chrysler's in 1993.

David N. McCammon, the vice president for finance and treasurer of Ford, said it trailed mostly because it sold more cars than highly profitable light trucks, a problem he said the company was remedying.

The torpid European car market continued to weigh down Ford's earnings. For the year, Ford lost $407 million in Europe, compared with $647 million in 1992, including the restructuring charge.

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