Trucks drive Ford to record earnings

Aluminum-bodied F-150, SUV sales help automaker beat analysts’ estimates

Ford Motor Co. posted fourth-quarter profit that beat analysts’ estimates as the aluminum-bodied F-150 pickup finally hit its stride and SUV sales surged, delivering record annual earnings for the second-largest U.S. automaker.

Profit excluding one-time items improved to 58 cents (U.S.) a share from a loss of 65 cents a year earlier, Ford reported Thursday. The average of 12 analyst projections compiled by Bloomberg was 51 cents.

Rising sales of high-profit SUVs propelled Ford to 2015 pretax profit of $10.8 billion, the most in the company’s 111-year history. The automaker sold 780,354 F-Series pickups in the U.S. last year, making it that nation’s top-selling vehicle line for the 34th straight year and helping Ford to an 8.2-per-cent North American profit margin in the final quarter.

Investors, fearing Ford has peaked, have pushed down the company’s shares 16 per cent this year.

“The vast majority of Ford’s profits come from North America and the market, very abruptly, came to the conclusion that U.S. auto sales are peaking in 2016 or have already peaked,” David Whiston, an analyst at Morningstar Inc., said before the earnings release. “The market wants growth. If you’re not growing, you’re standing still or dying.”

Automotive sales in the fourth quarter rose 12 per cent to $37.9 billion. North American pretax profit jumped to $2.03 billion from $1.6 billion a year earlier.

“We really started to see the international operations start to come forward,” chief financial officer Bob Shanks told reporters at the company’s headquarters in Dearborn, Mich. “And that is the big opportunity for Ford going forward.”

While costs such as the redesign of the Super Duty pickup will weigh on margins this year, North American operating profit margin will probably continue in the 10-per-cent range, he said. Ford is forecasting 9.5 per cent or better.