Ford Reports $2.7 Billion Profit for 2009

Published: Fri 29 Jan 2010

Larry Roth

In 2009, the Ford Motor Company earned a profit of $2.7 billion and announced Thursday that it also expects to remain profitable in 2010.

Ford's 2009 profit, which translates to 86 cents per share, represents an increase of $17.5 billion from 2008, when the automaker reported a loss of $14.8 billion. This is Ford Motor Company's first one-year profit since 2005.

The automaker concluded 2009 with cash reserves of $25.5 billion, almost double the $13.4 billion it had at the beginning of the year.

Ford also predicts an operating profit in 2010, which is one year earlier than executives had previously stated the automaker would consistently turn a profit.

"While we still face significant business environment challenges ahead, 2009 was a pivotal year for Ford and the strongest proof yet that our One Ford plan is working and that we are forging a path toward profitable growth by working together as one team, leveraging our global scale," explained Alan R. Mulally, Ford's chief executive, in a statement. "In every part of the world, we are providing customers with great products, building a stronger business and contributing to a better world."

In the fourth quarter of 2009, Ford made $868 million, equaling 25 cents a share, contrasted with a loss of $6 billion, or $2.51 per share, in the same quarter of 2008.

Ford was profitable in every geographic region, including the North American market, for the second straight quarter. The North American market has been the biggest challenge for all auto manufacturers, but North America was the most profitable area for Ford in the fourth quarter, with earnings of $707 million before taxes.

Revenue for the fourth quarter was $35.4 billion, an increase of $6.4 billion from last year. For 2009 as a whole, revenue dropped by $19.8 billion, to $118.3 billion.

The full-year profit will mean that hourly workers will get profit-sharing checks that average $450, according to Ford.

Ford gladly differentiated itself from Chrysler and General Motors in 2009 by rejecting government loans and not filing for bankruptcy. That decision burnished the company's reputation and helped attract new customers.

For the first time since 1995, Ford boosted its market share in the U.S., despite the fact that it also increased profit margins by lowering customer discounts.

Of late, Ford has been one of the few success stories in an auto industry beleaguered by grim selling conditions. At this month's Detroit auto show, Ford won the North American Car and Truck of the Year awards. Ford shares rose to over $12 this month, from February of 2009's low of $1.50.