In the latest fourth quarter, Ford Motor Co. had its lowest operating profit of the year. But there’s a bright lining in Europe. Ford is recovering more briskly in Europe than its rivals as it uses its revival in the U.S. as a guide. Ford has reported losses of over $1.5 billion for the full year in Europe and has predicted that 2013 will be no different. When interviewed at the Detroit auto show, CFO Bob Shanks said that these losses will start to vanish in about two years. Peter Nesvold, a Jefferies Group Inc. analyst, said that Ford will be ahead of General Motors Co. by about a year in its efforts to overhaul operations in the region. He said that the automaker’s board has demonstrated more conviction in its European restructuring plan by doubling the quarterly dividend earlier this month.
In an interview, Nesvold said that Ford was able to achieve what it set out to do in North America without any external help. He explained that the issues in Europe are not identical but they are similar. In the fourth quarter, the revenue of Ford fell by 4.4% to $33.1 billion, the average of 11 estimates compiled by Bloomberg, from $34.6 billion the previous year. The average of 19 estimates is for 26 cents of operating profit per share, up from 20 cents a year earlier.
CFO Shanks said that the past nine months for the company have been “wonderful” when it comes to raising its profitability, margin and in posting a highly positive operating cash flow. He expressed confidence that this trend will continue. In 2006, CEO Alan Mulally came to Ford from Boeing Co. He used $23.4 billion that the company borrowed late that year to revamp its range of fuel-efficient models like the Focus and Fiesta.