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Ford profit sets record
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January 26, 2000: 8:47 a.m. ET
Exceeds 4Q estimate by 2 cents a share in record year for vehicle sales
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NEW YORK (CNNfn) - Ford Motor Co. reported what it called the largest annual profit in the auto industry's history Wednesday, as it exceeded analysts' estimates for the fourth quarter.
The company said its sales momentum is good going into this year, and it expects to improve results in 2000, saying it wants to cut $1 billion from costs during the year and grow revenue by $5 billion.
It also took another step in its efforts to spin off or sell its Visteon auto parts division during the year, announcing a pricing study of products the division sells to Ford. It said it believes the study will reduce the prices Visteon charges Ford, but it would not estimate by how much.
For the quarter, the nation's second-largest automaker had net income of $1.8 billion, or $1.47 a diluted share. Analysts surveyed by First Call had forecast $1.45 for the period.
In the year-earlier period, Ford earned $1.7 billion, or $1.35 a diluted share, before an after-tax charge of $631 million, or 51 cent a share, for employee separation programs.
The company's greatest gains came from North American vehicle sales, where a combination of increases sales, especially of more-profitable vehicles, produced a record $1.6 billion in earnings in the quarter, compared with $1.0 billion a year earlier.
Fourth-quarter losses from overseas vehicle sales narrowed from a year ago while profits dropped at Visteon during the quarter because of increased labor expenses and lower prices. But the Hertz rental car and Ford Credit units saw improved profitability in the quarter.
Revenue for the quarter rose to $44.4 billion from $37.9 billion.
For the year, earnings from continuing operations rose to $7.2 billion, or $5.86 a diluted share, from $5.9 billion, or $4.72 a share, a year ago. That excludes a gain from the disposition of Associates First Capital (AFS) consumer and commercial lending unit during that year.
Ford's previous record result was the $6.9 billion it earned 1997, when its results included Associates.
Annual revenue also reached a record of $162.6 billion, compared with $144.4 billion in 1998.
Industry sales set a record in 1999, with almost 17 million vehicles sold in the United States. Ford's vehicle sales rose 10 percent in the year to 4.3 million in the United States. Worldwide, it sold 7.2 million vehicles, up from 6.8 million in 1998.
Shares of Ford (F) closed down 1 to 50-1/8 Tuesday. 
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