CHICAGO -- Ford posted sharply lower profits in both 2012 and the fourth quarter Tuesday but managed to beat expectations despite a worsening situation in the U.S. automaker's European unit.
Ford's losses in Europe hit $1.8 billion in 2012 and it warned that it will lose another $2 billion this year as demand for vehicles continues to fall, the euro strengthens against the dollar and Ford (IW 500/6) faces heavy restructuring costs.
"The business environment remains uncertain, and Ford will continue to monitor the situation in Europe and take further action as necessary," the automaker said in a statement.
Ford's results were also affected by accounting changes which boosted 2011 profits.
After-tax profits were $5.7 billion in 2012, well down from the $20.2 billion posted a year earlier.
Excluding special items and accounting changes, the results were down just 5% at $1.41 per share, which beat average analyst expectations of $1.34.
"The Ford team delivered strong results once again, underscoring that our One Ford plan is working," said Alan Mulally, Ford president and CEO. "We are well positioned for another strong year in 2013."
The automaker forecast that its 2013 pre-tax profits would come in "about equal" to the $8 billion posted in 2012 while its cash flow from automotive operations would come in higher than the $3.4 billion achieved in 2012.
Ford's 2012 revenues fell 1.4% to $134.3 billion, largely as a result of the crisis in Europe, but were higher than the $125 billion expected by analysts.
Fourth quarter net earnings fell 88% to $1.6 billion. However, they rose by about 50% excluding special charges and accounting changes and at 31 cents a share came in higher than the 25 cents expected by Wall Street.
Ford's once-troubled North American unit was once again a bright spot with record profits of $8.3 billion in 2012, a $2 billion improvement over 2011, and $1.9 billion in the fourth quarter, a $1 billion gain. The unit's operating margin for the year rose two points to 10.4%.
Ford's South American division saw profits fall to $213 million, about a quarter of what they were a year earlier, and it warned that it would likely merely break even in 2013 as a result of "the competitive environment and currency risks across the region."
Ford's results in Asia were impacted by high costs associated with new products and plants and came in at a loss of $77 million in 2012, a slight improvement from the $92 million loss in 2011. It forecast the region would break even in 2013.
Copyright Agence France-Presse, 2013