The last few years have been good for the automobile industry and Ford Motor Company (NYSE:F) in particular. Low interest rates and replacement demand ensured that the company achieved its highest sales in a decade last year. Its F-Series pickup vehicle was the best-selling vehicle for the 34th consecutive year in the United States. For the fourth quarter, its earnings and revenues came in well above expectations.
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Profit Doubles
Ford said that its net earnings witnessed more than 100% growth to $1.9 billion in the fourth quarter. Excluding special items, its earnings were 58 cents a share, which was eight cents a share higher than the Street analysts’ expectations of 50 cents a share. Its pre-tax profit, after adjustments, also jumped to by $1.3 billion to $2.6 billion in the December quarter.
The company’s top line advanced 12% to $40.3 billion, which was also more than analysts’ estimations of $36.4 billion. The second biggest automaker indicated that its automotive operating cash flow was $2.1 billion in the fourth quarter and $7.3 billion for the full year.
Breakthrough Year
Ford CFO Bob Shanks, said that he considered the year 2015 as a ‘breakthrough year’ following its heavy spending in the preceding year to establish new plants. The company’s idea was to focus on Asia and bring the F-150 pickup vehicle, which will be new and aluminum-sided, to the American market. Its pretax profit for the full year climbed 48% to $10.8 billion driven by the uptick in market share, as well as international sales. Its recent results benefited from a change in accounting practices to deal with pension costs.
Last year, Ford unveiled 16 vehicles throughout the globe, which was down from 24 in the preceding year. The company’s sales reached 1.1 million in China with the support of the three-row Edge SUV and new products. The automaker’s net income climbed to $7.4 billion in 2015 while adjusted earnings were $1.93 a share, which was above predictions of $1.73 a share. Its revenue grew 4% to $149.6 billion. Shanks indicated that worldwide weak oil prices along with the low interest rates and a rising housing market were good for the current year for the industry.