Ford Motor Co. reported a loss of $783 million in the fourth quarter because of a $2 billion non-cash accounting remeasurement announcement last week. Nonetheless, Ford’s profit was 30 percent per share, matching analysts’ expectations.
The second-largest U.S. automaker said in a regulatory filing last week that it has expected a major accounting change. The remeasurement tallied pension gains and losses in 2016, thus, bringing the net income down by $2 billion.
Ford Posts Q4 Loss
Ford Motor Co. also has to face a one-time charge of $200 in expense related to canceling a $1.6 billion small car plant in Mexico. Albeit, the Dearborn automaker was able to save $500 million by shifting production to another location in Mexico. The plant closed due to a dip in demand for small cars, and not due to harsh criticism by the U.S. President Donald Trump.
“We achieved a solid 2016 net income of $4.6 billion, as well as an adjusted pre-tax company profit of $10.4 billion, which was our second best ever — building on the all-time record we had set the year before,” Ford President and CEO Mark Fields said in a statement. “This underscores the substantial progress we are making in expanding our business to be an auto and a mobility company.”
Meanwhile, Ford also reported profit sharing of $9,000 for its 56,000 United Auto Workers hourly workers. In 2015, more than 52,900 UAW hourly workers received $9,300. The profit sharing is determined by its pre-tax North American profits, which came down to $9 billion in 2016. The figure is down from $344 million in 2015. Ford’s hourly employees earn $1 for every million of its pre-tax NA profit.
Ford’s Q4 2016 net income totaled $783 million, down $2.65 billion from the previous year during the same quarter. While, it’s adjusted pre-tax profit totaled $2.1 billion, down by $478 million. In 2015, the automaker posted $7.4 billion in net income, and a record $10.8 billion pre-tax profit.
Analysts estimated Ford to earn 32 cents per share in Q4 2016, down from 58 cents per share it earned during the same period a year ago. The second largest U.S. automaker has also maintained a forecast for 2017, expecting less profit than 2016.