Ford reported fourth-quarter and full-year 2016 earnings on Thursday.
For the quarter, earnings were $0.30 per share, in line with analysts expectations according to Bloomberg.
Revenue for the quarter was $38.7 billion, higher than expected. For the full year, revenue was $151.8 billion, and “net income [was] $4.6 billion, down $2.8 billion from a year ago due to $3.0B 4Q pre-tax pension remeasurement; full-year total company adjusted pre-tax profit $10.4B, down slightly from a year ago,” Ford said in a statement.
The pension adjustment weighed on Ford’s performance for 2016.
“The strength of our full-year results across so many parts of the business was really encouraging,” CFO Bob Shanks said in a statement. “We had a solid net income, although lower than last year because of our pension remeasurement.”
But in an interview with Business Insider after earnings were released, Shanks highlighted a record profit in Europe for 2016, in a market that has presented challenges to the industry.
“The team worked really hard,” Shanks said of the $1.2-billion pretax profit and 4.2% operating margin the automaker notched.
Nevertheless, North America led the way in powering Ford’s 2016 revenue, with nearly $93 billion earned in that market. Operating margin was 9.7%.
However, the automaker said that its profit performance in 2017 will be less impressive than in 2016.
At various points in 2016, Ford had cautioned investors that this would be the case.
“That’s really around making investments in new opportunities,” Shanks said.
Ford CEO Mark Fields has been aggressively positioned the company as a mobility provider, as the auto industry seeks to deal with challenges from Tesla, Uber, and other new entrants.
Shanks also said that Ford is “comfortable” with its US manufacturing capacity, having announced investment in existing plants and with the opportunity to manage production to address high market demand for SUVs and pickup trucks.
President Donald Trump has insisted that automakers build plants and hire workers in the US. But with the North American market running at peak levels in terms of sales, car companies are reluctant to add additional capacity.
Ford shares slid slightly in pre-market action in Thursday, to $12.72. The stock has risen 8% in the past three months.
- Markets Insider