Europe is dragging Ford down

The automaker blew away expectations in its fourth quarter. But its performance in Europe was miserable, with nearly $2 billion in losses for the year and more expected in 2013.

By Jonathan Berr Jan 29, 2013 1:11PM

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."Ford emblem at the Chicago Auto Show JEFF HAYNES/AFP/Getty Images


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

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Jan 29, 2013 2:31PM
This is the most misleading headline ever.  Has Mr. Berr shorted Ford's stock and is he hoping to get some of his money back?  Ford did not lose $2 billion as the headline states.  Ford made money.  They beat expectations.  They project $2 billion of losses on European operations for 2013 but at least imply that they are going to make money for the year due to better performance everywhere else.  If I was Ford, I would be having so serious words with the management of MSN Money
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