Near-record profits in North America and continued strong performance from Ford Credit helped the Ford Motor Company [NYSE: F] deliver its 12th consecutive quarterly pre-tax operating profit as it reports second quarter 2012 results today.
The company reported a pre-tax operating profit of $1.8 billion, or 30 cents per share, and net income of $1 billion, or 26 cents per share. The company also continued to generate positive Automotive operating-related cash flow, and ended the period with a strong liquidity position of $33.9 billion, an increase of $1 billion during the quarter.
“The Ford team delivered another solid quarter driven by the strength of Ford North America and Ford Credit,” said Alan Mulally, Ford president and chief executive officer. “We remain absolutely committed to continuing to make progress on our One Ford plan, including dealing decisively with near-term challenges, investing for future growth, and developing outstanding products with segment-leading quality, fuel efficiency, safety, smart design and value.”
Second quarter 2012 net income was affected by lower operating results and the impact of higher tax expense compared to a year ago that resulted from the release of the tax valuation allowance in the fourth quarter of 2011.
Ford finished the second quarter with Automotive gross cash of $23.7 billion, an increase of $700 million during the quarter. Automotive debt of $14.2 billion at the end of the second quarter was up from $13.7 billion at the end of the first quarter, primarily reflecting additional drawdowns of low-cost loans for the development of advanced vehicle technologies. The company will make its last draw on these loans by August 2012, and repayment of the loans begins in September 2012.
Ford also made payments of $800 million to its worldwide funded pension plans, of which $500 million were discretionary payments to U.S. funded plans, in line with the company’s previously-disclosed long-term strategy to de-risk its funded pension plans. Dividends paid in the quarter totaled nearly $200 million. Automotive gross cash exceeded debt by $9.5 billion at the end of the second quarter, a net cash increase of $200 million during the quarter.
Going forward, Ford remains committed to all aspects of its One Ford plan, which is unchanged:
- Aggressively restructure to operate profitably at the current demand and changing model mix
- Accelerate the development of new products that customers want and value
- Finance the plan and improve the balance sheet
- Work together effectively as one team, leveraging Ford’s global assets
Ford also continues to work toward its mid-decade outlook by implementing its One Ford plan.
“We have made tremendous progress in recent years by executing the fundamentals of our One Ford plan,” said Mulally. “Our One Ford plan led the way through the successful restructuring of our North American business and the recent economic recession. It remains our guide as we work to sustain our strong Ford North America operations and grow our important Ford Credit business, while addressing the diverse challenges and opportunities we have in other parts of the world.”
About Ford Motor Company
Ford Motor Company, a global automotive industry leader based in Dearborn, Mich., manufactures or distributes automobiles across six continents. With about 168,000 employees and about 65 plants worldwide, the company’s automotive brands include Ford and Lincoln. The company provides financial services through Ford Motor Credit Company. For more information regarding Ford’s products, please visit www.ford.com.
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