Ford Motor Co. logged a 24-percent drop in pretax operating profit in the fourth quarter of 2013, no thanks to the recall of the Ford Escape, higher incentives and factory shutdowns in South America. Revenue also surged 4 percent in the fourth quarter to $36.3 billion. The carmaker also posted a 9-percent dip in pretax operating profit in North America to $1.7 billion in the fourth quarter.
Ford said that its results in North America suffered from higher warranty and structural costs as well as lower net pricing. The company accrued $300 million in warranty costs, mainly related to a November recall of over 161,000 Ford Escapes to fix a glitch linked to 13 fires.
Net income for the quarter of 2013, however, surged to $3 billion, over two-thirds of which were due to favorable one-time tax benefits. This helped Ford post $7.2 billion in net income for full year 2013, up from $5.7 billion in 2012. Ford’s automotive operations logged $6.9 billion in pretax profit in 2013. Revenue for full year 2013 was up 10 percent to $146.9 billion.
Ford managed to sell 2,485,236 vehicles in the United States in 2013 for an 11-percent surge. It also managed to hike its US market share to 15.9 percent. The good results for 2013 means that the carmaker’s 47,000 UAW-represented hourly employees will receive profit-sharing checks averaging $8,800 for a total $414 million.
"We had an outstanding year in 2013, demonstrating that our One Ford plan continues to drive solid results and profitable growth for all," Ford chief Alan Mulally said in a statement. "We are well positioned for another solid year in 2014." [source: Ford]