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Loss Narrows as Ford Reduces Costs

January 22, 2003|From Bloomberg News

Ford Motor Co. said Tuesday that its fourth-quarter loss narrowed to $130 million as the world's second-largest automaker accelerated cost cutting under a turnaround plan announced a year ago.

The per-share net loss was 7 cents, compared with a year-earlier net loss of $5.07 billion, or $2.81 a share. First-quarter earnings will be about 20 cents a share, Chief Financial Officer Allan Gilmour said. The company's last quarterly profit was 29 cents a share in the second quarter.

"It's not going to be an overnight transformation," said David J. Williams, a money manager at U.S. Trust Corp., which owns 700,000 Ford convertible shares. "The fundamentals are improving, but I don't have any great short-term expectations."

Ford trimmed the average cost to make its cars and trucks by $237 per vehicle last year, beating a goal of $200. Those savings are intended to offset the cost of new models that Chief Executive William Clay Ford Jr. is counting on to revive profit. The company also benefited from increased sales of more expensive vehicles such as the $50,000 Lincoln Navigator sport utility vehicle, analysts said.

Demand for more expensive models helped revenue rise 2.1% to $41.6 billion even as Ford's worldwide vehicle sales fell 1.2% in the fourth quarter to 1.79 million cars and trucks. Ford said it would boost first-quarter production by 25,000 cars and trucks to 1.04 million.

The Dearborn, Mich.-based company's shares fell 2 cents to $10.14 on the New York Stock Exchange.

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