Aftermarket Leads: One-Time Tax Allowance Boosts Ford Profit to $20 Billion in 2011

Aftermarket Leads

January 28, 2012 11:09 am

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One-Time Tax Allowance Boosts Ford Profit to $20 Billion in 2011

Just the Facts:

• Ford’s fourth-quarter and full-year earnings benefitted from a one-time tax allowance.
• The automaker still reported a significant pretax operating profit in 2011 of $8.8 billion.
• It was the third consecutive year of profits, and Ford’s most profitable year since 1998.

DEARBORN, Michigan — Bolstered by a one-time tax gain, Ford Motor Company reported a massive profit of $20.2 billion in 2011 — its third consecutive year of profit and the automaker’s most profitable year since 1998.

In the fourth quarter, Ford eliminated a special accounting allowance against future losses — an indication that the company believes it has entered a period of sustained profitability and no longer needs the reserve. The elimination of that allowance added $12.4 billion in profit to its quarterly and full-year earnings.

Even without the accounting gain, Ford’s pretax operating profit in 2011 was $8.8 billion.

On the down side, the automaker posted losses in Europe and Asia Pacific, but North American operations reported gains in revenue and net income. Pretax operating profit in North America last year rose 15 percent to $6.2 billion.

For the year, Ford recorded revenue of $136.3 billion, up 13 percent from 2010.

The company also slashed debt by $6 billion and boosted net cash reserves by $8.4 billion.

Inside Line says: Accounting change or not, Ford is making money, but its weakness in foreign markets in likely to keep its stock down.

See original here:
One-Time Tax Allowance Boosts Ford Profit to $20 Billion in 2011