Ford Motor Company (F) Q4 2003 earnings summary

Executive summary

• FY2003 net income was $495M, or $0.27/share, versus a $980M loss in 2002; continuing-operations income was $921M.

• Revenue increased to $164.2B from $162.3B; automotive sales rose 3% to $138.4B, while automotive remained loss-making.

• Financial Services pretax income improved to $3.327B from $2.104B, more than offsetting the automotive pretax loss of $1.957B.

• Automotive cost savings exceeded $3B at constant volume, mix and exchange, excluding special items; net cash ended the year at $10.9B.

Financial highlights

• Total revenue was $164.196B; income before taxes was $1.370B, continuing-operations income $921M and net income $495M.

• Diluted EPS from continuing operations was $0.50; net income per share was $0.27, versus a $0.54 diluted loss in 2002.

• Automotive operating loss widened to $1.531B from $528M; Financial Services pretax income grew to $3.327B from $2.104B.

• Reported results included $2.061B of automotive special-item charges, including $513M for European restructuring and a $1.6B Visteon-related charge.

Outlook and guidance

• 2004 EPS from continuing operations, excluding special items, was expected at $1.20–$1.30; estimated 2004 special items were up to $300M pretax.

• 2004 pretax profit milestone was $3.5B–$3.8B, excluding special items; operating-related cash flow target was $1.2B positive, excluding pension/long-term VEBA contributions and tax refunds.

• 2004 assumptions: U.S. industry volume 17.0M units, Europe 16.9M; industry net pricing down slightly in both regions.

• The mid-decade target remained $7B pretax profit excluding special items by year-end 2006; management expected a slower pace of improvement in 2004.

• European restructuring was expected to incur about $160M of additional charges in H1 2004, with cost savings of about $450M in 2004 and $550M annually thereafter.