Ford reported a tale of two continents in itsquarterly earnings today, with robust North American profits but deepening losses in troubled Europe.
In the United States, Ford has become a sales and earnings juggernaut, posting pretax profits of more than $8 billion last year, including $2 billion in the fourth quarter on the strength of a 4.7 percent increase in U.S. auto sales last year and an increasingly healthy pickup-truck business. Ford's U.S. employees will share in the bounty to the tune of a profit-sharing check averaging about $8,300 per hourly worker for 2012, up from about $6,200 each in 2011.
Yet Ford could only report an increasingly woeful picture in Europe, which is slipping into a continent-wide recession. Ford Europe lost $732 million in the fourth quarter and $1.75 billion for the full year — more than Ford's previous forecast of $1.5 billion in European losses for 2012.
Worse, Ford is projecting losses of about $2 billion in Europe in 2013 as it cuts jobs, trims operations, faces softening prices and otherwise attempts to cope with the market contagion there. The only silver lining for Ford in Europe is that industry analysts believe Ford may be ahead of General Motors in its recovery efforts in the region.
At home, things are hunky dory for Ford despite recent setbacks such as a spate of recalls on the new version of its Ford Escape SUV. Mainstream American consumers now are willing to consider a Ford vehicle in every car, SUV and truck segment, and the automaker's determined attempt torevive its Lincoln luxury brand (including a Super Bowl ad buy) could produce some gravy as well.
But now and always for Ford, pickup trucks remain the most important story. Sales of F Series trucks around the world account for a whopping 90 percent of corporate profits, according to a Morgan Stanley estimate. F Series deliveries in the U.S., by far the most important market for the segment, grew by 10 percent in 2012, more than doubling Ford's overall sales increase — and despite Ford not fielding any significantly overhauled version of its F-150 mainstay last year.
However, Ford gave the F-150 a fuel-sipping EcoBoost engine in 2011 that didn't sacrifice performance. Now about half of all F-150s are sold with an EcoBoost six-cylinder powertrain.
For this year, Ford is betting not only on better days at Lincoln but also on accelerating orders for its new Escape and a redesigned Ford Fusion to help fuel continued strength in the U.S. market.
"The consistent performance in North America will continue into 2013," said Ford CFO Bob Shanks said.
Ford ranked first in brand loyalty among American auto consumers in 2012, according to a tracking study of car-registration data by Polk Automotive.
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