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Ford’s Earnings: A Closer Look

Gains in North America run headlong into problems abroad, higher commodity prices.

by on Jan.27, 2012

Ford officials won't predict whether they can continue gaining share -- and raising prices -- even with the launch of key new products like the 2013 Ford Fusion.

Sometimes it can be difficult to please Wall Street.  As trading for the week neared its close the automaker’s shares were on track to drop about a half dollar as trader’s lamented the sort of figures that they might have only fantasized about during the depths of the Great Recession.  The maker reported a full-year pre-tax operating profit of $8.8 billion, or $1.51 a share, an increase of $463 million over 2010.

But what didn’t sit so well is that Ford still fell about a nickel a share short of early estimates, and more worrisome, total automotive pre-tax operating profits for the fourth quarter dipped to $586 million, a decrease of $155 million from the fourth quarter of 2010.

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What’s behind it all?  Analysts and company officials seem to agree on key factors including

  • Losses in both Europe and Asia Pacific;
  • Declining profits in the otherwise strong South American market;
  • Flooding in Thailand, in particular, hurt the maker in a number of regions; and
  • Commodity prices soared by about $100 million more than Ford initially planned for.