A 5-cent quarterly dividend will be given to Ford Motor Co. shareholders on March 1 – their first payout since September 2006. Ford, the second-largest U.S. automaker, makes this move after it reported earnings of $1.65 billion in the quarter that ended in September. This is the tenth straight quarter that Ford has been profitable.
Ford has recently entered a four-year deal with the United Auto Workers that affects 40,600 of its hourly workers in the U.S. In a statement, Ford said that this dividend will be given to shareholders of record on Jan. 31.
In this statement, Executive Chairman Bill Ford said that the board considers it important to share with shareholders the gains that it has had from the improvements in its financial performance. He added that providing dividends is an “important sign” of progress in a company that increases its profits as well as its confidence.
Chief Executive Officer Alan Mulally was able to revive Ford by concentrating on the fuel economy and quality of its new models like the Fiesta subcompact and Explorer sport-utility vehicle, which was redesigned. In the past couple of years, Ford has recorded earnings of $9.28 billion.
It had lost $30.1 billion during the period from 2006 through 2008 with the drop in sales being followed by the global financial crisis. In New York, Ford’s shares fell by 3% to $10.75 at its closing.
Shares fell 36% this year after increasing 68% in 2010. In a recent conference call, Chief Financial Officer Lewis Booth said that this payout will cost Ford about $200 million a quarter. Booth said that Ford aims to avoid reducing the dividend if the economy suffers like in the past. But he asserts that Ford has significantly restructured the company and its break-even is lower than it had been in the past. [source: Autonews]