Europe is dragging Ford down

Ford Motor (F), the only U.S. automaker that didn't need a government bailout, demolished expectations Tuesday in its fourth-quarter earnings report. But shares still slid as Wall Street focused on the massive hemorrhaging in the company's European operations.

The company lost $732 million in Europe during the quarter and $1.75 billion for the full year. It expects losses there to rise in 2013. As Bloomberg notes, Ford plans to introduce a new version of its Mustang sports car in Europe and will triple the number of sport utility vehicles that it offers on the continent to try to reverse its fortunes. It won't be easy.

Ford shares fell nearly 6% to $12.99 in morning trading, bringing down its gains over the past year to 5.7%.

"Some of the worst months of the year (in Europe) happened to close out 2012 -- even Germany posted a year-over-year decline in December of over 16%," writes Morningstar analyst David Whitson in an email to MSN. "The UK is the only major market there currently growing."

 

Overall, the company's earnings were good.  Profit was 6 cents a share better than analysts expected. Most companies are happy to beat expectations by a penny or two. Ford also told investors it expects to earn more money in North America as its U.S. market share increases.  Profit also rose in South America and in Asia, Pacific and Africa. You can read all the details here.

 
Ford was helped by better-than-expected​ results in North America, where it reported a record pre-tax profit of $1.87 billion fueled by strong sales of its "F" series pick-up trucks, which saw a 10% rise in deliveries last year. Overall, the company expects pre-tax profits to rise in 2013 above 2012 levels.  Operating margins are expected to hit 10%.

U.S. Ford workers represented by the United Auto Workers union will earn an average of $8,300 through a profit-sharing agreement.

--Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr

More on moneyNOW

• Are colleges teaching the wrong skills?
  

• Starbucks finds gold in drive-up windows
  

• Gun scrutiny spreads to toy shelves