Ford Earnings Beat Estimates on Weak Revenue, Shares Whipsaw

Ford Motor F reported fourth quarter earnings pre-market Tuesday that beat analyst forecasts and shares rose in the pre-market. Although revenue was slightly weaker than forecast in the quarter, shares rose in the pre-market on relatively strong guidance.

For the fourth quarter of 2012, Ford reported earnings per share of $0.31 compared to forecasts of earnings per share of $0.26. In the same period a year ago, Ford reported earnings per share of $0.22, meaning that earnings per share grew 41 percent from the same period a year ago.

Revenue was slightly weak in the quarter, with revenue reported at $33.1 billion, slightly below forecasts of revenue of $33.17 billion. Sales grew 2 percent from the same period a year ago.

Other highlights from the press release showed that Ford grew its cash position to bolster its liquidity and results were driven by positive trends in North America. Ford generated $1 billion in free cash flow in the fourth quarter and $3.4 billion in free cash flow for the full year 2012, increasing its total cash to $24.3 billion and its liquidity position to $34.5 billion. Ford also noted that North American results drove the strong earnings while European sales continued to weigh as the continent escapes recession.

"The Ford team delivered strong results once again, underscoring that our One Ford plan is working," said Alan Mulally, Ford president and CEO. "We are well positioned for another strong year in 2013, as we continue our plan to serve customers in all markets around the world with a full family of vehicles — small, medium and large; cars, utilities and trucks — with the very best quality, fuel efficiency, safety, smart design and value."

"Our focus this year will be to continue our strong performance in North America and at Ford Credit, while at the same time, addressing challenges and opportunities in other parts of our business," said Bob Shanks, Ford chief financial officer. "In Europe this means executing our transformation plan, while in South America we will continue to refresh our entire product line-up, and in Asia Pacific we will continue to invest for even stronger, profitable growth in the future."

Looking forward, Ford sees continued sales and earnings growth in the North American market while it expects to be break-even in South America and a loss of approximately $2 billion in Europe in 2013. Ford also expects the Asia Pacific region to be about break-even in 2013.

Ford shares initially popped then sold off on the earnings release. Shares declined 1.74 percent pre-market to $13.54 per share. Shares are just below the 52-week high at $14.30.