Green from blue

28 Jan 2014 By Antony Currie Follow @AntonyMCurrie

The carmaker beat profit estimates in the fourth quarter. But 2014 will be tougher as Ford prepares for new launches. Its retirement obligations, though, are now less daunting. That’s freeing up an extra $3 bln of cash even after the recent dividend hike. It’s a welcome breather.

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Ford Motor on Jan. 28 reported fourth-quarter net income of $3.1 billion, about a 90 percent increase from the same period in 2012. Results included a $2.1 billion tax benefit. Excluding this and $311 million of charges related to laying off European workers, Ford earned $1.2 billion, just less than a year earlier, or 31 cents a share, 3 cents more than the consensus estimate of sell-side analysts.

The underfunded status of Ford’s pension plans globally fell by $10 billion to $9 billion. U.S. pension plans’ underfunded status fell to $2 billion from $9.7 billion. The improvement was due in part to Ford contributing $5 billion to the plans last year and in part to a change in the discount rate from 3.84 percent to 4.74 percent.

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