Ford Posts $130 Million Loss for 4Q - A few bucks here a few bucks there....

DEARBORN, Mich. January 21, 2003; John Porretto writing for the AP reports that Ford Motor Co. narrowed its loss to $130 million in the fourth quarter, primarily due to its ongoing restructuring, but some observers are skeptical of the company's forecast for market share and hefty earnings growth this year.

The world's second-largest automaker lost 7 cents a share in the October-December period compared with a loss of $5.07 billion, or $2.81 a share, a year earlier.

Excluding charges for restructuring and other one-time expenses, Ford earned $150 million, or 8 cents a share, in the fourth quarter - a penny a share more than the forecast of analysts surveyed by Thomson First Call. Excluding charges, Ford lost $860 million, or 48 cents a share, in the fourth quarter of 2001.

Revenue in the latest quarter was $41.6 billion, up $869 million from a year ago, despite a decline in the number of vehicles sold worldwide to 1.79 million from 1.8 million in 2001.

Ford's global automotive operations trimmed full-year losses in 2002 but remained $500 million in the red. Domestically, heavy incentives have eaten away at profits at Ford, General Motors Corp. and others, and the trend continues.

Ford expects automotive operations to break even this year.

Ford's U.S. market share fell 1.6 points to 21.2 percent in the fourth quarter, and 1.7 points for the full-year to 21.1 percent.

GM, the world's No. 1 automaker, said last week its U.S. market share grew to 28.3 percent in 2002 from 28.1 percent in 2001. It was the first time since 1976 that GM improved its U.S. market share in back-to-back years.

Bill Ford, Ford's chairman and chief executive, reiterated in a conference call Tuesday that he expects the company to improve market share in all global regions in 2003 and to post full-year earnings of 70 cents a share - well ahead of recent Wall Street forecasts.

"With the plans we have in place and our growing momentum, I'm confident we can do this," Ford said.

Nonetheless, Ford shares fell 2 cents to close Tuesday at $10.14 on the New York Stock Exchange.

After Ford's initial 2003 earnings and market share comments to analysts Jan. 10, Credit Suisse First Boston raised its 2003 earnings forecast for Ford to 56 cents a share from 40 cents.

Still, the brokerage said, "We're less optimistic than Ford is about the company's ability to increase its market share in the U.S. in 2003."

The automaker said it expects to receive a boost from the introduction of several new products, including the new F-150 pickup later this year, part of the world's best-selling F-Series lineup.

The company said it also has identified $1 billion in non-product expenses that can be slashed and that it plans to increase North American production by 25,000 vehicles in the first quarter.

Earlier this month, Bill Ford said the company's year-old turnaround was on track but acknowledged that increasing competition and economic uncertainties pose challenges for meeting future financial goals.

For example, while Ford lost ground in the United States last year, Toyota Motor Corp. and Honda Motor Co. - the two largest foreign automakers in the United States - both saw their shares grow.

Toyota, including the Lexus brand, went to 10.4 percent from 10.2 percent and Honda, including Acura, went to 7.4 percent from 7.1 percent.

Like others in the industry, Ford expects U.S. light vehicle sales to decline in 2003 to about 16.5 million, down from 16.8 million last year.

John Casesa of Merrill Lynch said the push for accelerated cost reductions reflects Ford's worries about increased competition, particularly in pricing, and ballooning pension liabilities.

"Tougher times call for tougher actions," Casesa said.

Ford's U.S. pension plans were underfunded by $7.3 billion at year's end. Ford said it contributed $500 million to the U.S. fund Jan. 6 and plans to add another $500 million in the first half of 2003.

The company said it ended 2002 with $25.3 billion in cash.

One-time charges in the fourth quarter included the reduction of 950 jobs at luxury brands Jaguar, Volvo and Land Rover.

For all of 2002, Ford posted a loss of $980 million, or 55 cents a share. Excluding unusual items and results from discontinued operations, Ford earned $872 million, or 47 cents a share.

In 2001, Ford had a loss of $5.45 billion, or $3.02 a share - a performance that prompted the company to launch a companywide restructuring a year ago this month. Excluding charges for restructuring and other one-time items in 2001, Ford's loss was $782 million, or 44 cents a share.

Revenue for 2002 was $162.6 billion, an increase of 1 percent from a year ago.

Ford's worldwide automotive operations posted a loss of $539 million, compared with a loss of $1.96 billion in 2001. In North America, Ford narrowed its automotive loss from $2.15 billion in 2001 to $559 million in 2002.

Ford Motor Credit Co., the automaker's financing arm, earned $1.38 billion in 2002, up $175 million from the year-ago period.