DEARBORN, Mich. — Ford Motor Co.'s fourth-quarter earnings rose 6.4%, beating expectations, as the world's No. 2 auto maker boosted sales of high-profit trucks in North America and cut costs.
Ford announced Thursday that profit from operations rose to $1.67 billion, or $1.35 a fully diluted share, from $1.57 billion, or $1.27, a year earlier. The company was expected to earn $1.27 a share, based on the average estimate in a First Call Corp. survey.
Ford's results add to a strong quarter for U.S. auto makers coming off their second-best sales year ever. The world's largest auto maker, General Motors Corp., on Wednesday reported a 13% rise in fourth-quarter earnings to $1.8 billion. Results from DaimlerChrysler are expected in February or March.
During the fourth quarter, Ford benefited from sales of its Expedition and Explorer sport-utility vehicles as well as redesigned commercial pickup trucks built at a revamped Louisville, Ky., plant that generate $10,000 each in pretax profit.
In addition, Ford cut costs by $300 million to $26.2 billion, exceeding its target, to better compete with its Detroit rivals.
Ford reported fourth-quarter revenue of $37.77 billion, off less than 1% from $37.90 billion a year earlier, excluding the spinoff of its Associates First Capital Corp. consumer finance unit.
Excluding all gains and charges, Ford earned $6.57 billion, or $5.30 a share, in 1998 on revenue of $144.4 billion.
Ford's string of 11 quarters with year-to-year earnings improvement is "an incredible achievement" given the industry's competitiveness, said analyst Nicholas Lobaccaro of Merrill Lynch & Co.
"If Ford can stay strong in North America, as we expect they will, if they can get more competitive in Europe, and if they can contain the losses in South America, this bodes well for 1999," said Gary Lapidus of Sanford C. Bernstein & Co.
As expected, Ford announced a fourth-quarter charge of $630 million, or 51 cents a share, for early retirements, the sale of its stake in Kia Motors Corp. of South Korea and a new joint venture that makes transmissions.
Adjusted for the charge, Ford's fourth-quarter net income was $1.04 billion, or 84 cents a share. Excluding an adjustment to reflect the spinoff of Associates First, net income was $1.8 billion, or $1.45 a share, in the year-earlier period.
Ford shares fell $2.63 to close at $62.06 on the New York Stock Exchange. Analysts attributed the drop to expectations, fanned by GM's robust earnings, that Ford would post even stronger results.
At a Glance
Other earnings, excluding one-time gains and charges unless noted:
* Ameritech Corp., the Baby Bell being acquired by SBC Communications Inc., matched analyst estimates with a 12% increase in profit to $684 million, or 61 cents a share. Revenue rose 7.1% to $4.44 billion as data services sales soared 43% and sales of call-management services such as caller ID grew 18%. Revenue from cable TV services more than doubled.
* SBC, the nation's No. 2 local phone company, said profit rose 20% to $1.08 billion, or 55 cents a share, a penny higher than estimates. Strong sales of caller ID and data services helped boost revenue 7.9% to $7.7 billion.
* Lucent Technologies Inc., the top telephone equipment maker, said fiscal first-quarter earnings jumped a better-than-expected 26% to $1.41 billion, or $1.05 a share, higher than forecasts of $1.01 a share. Revenue rose 6% to $9.2 billion, less than forecast, as more than $800 million in sales came in too late to be reported in the period, Lucent said. The company said there has been no drop-off in demand.
* Exxon Corp. said fourth-quarter earnings fell 30% to $1.53 billion, or 62 cents a share, beating estimates of 57 cents, as oil prices dropped to historic lows and profit from chemical sales slid. The company, which plans to acquire Mobil Corp. to form the world's largest oil company, said revenue fell 15% to $29.7 billion. Continuing low oil prices prompted Exxon and Mobil to reach a merger agreement to cut costs. Mobil said Thursday it will cut capital spending this year by 11%.
Separately, Mobil and Royal Dutch/Shell Group said they canceled plans to merge their Australian refining businesses because a lengthy approval process could disrupt Exxon's plans to buy Mobil. The $1.3-billion venture was announced in August, several months before Exxon announced the deal to buy Mobil.
* Monsanto Co.'s fourth-quarter profit dropped in line with forecasts, and the company said it will cut 1,700 jobs this year, rather than the 1,000 it announced as part of a restructuring plan two months ago. The maker of pharmaceuticals, nutritional and agricultural products said profit fell 51% to $27 million, or 5 cents a share, pulled down by higher spending on acquisitions, research and development.