DEARBORN, Mich. -

With some analysts attributing gains to its ability to capitalize on the bankruptcies of its domestic rivals, Ford Motor Co. now has the concrete figures back up its significant performance progress — including full-year net income that was the highest amount in more than 10 years.

“Ford is a company that was able to take advantage of Chrysler and General Motors’ bankruptcy period by renegotiating its own contracts with the unions and by investing in longer-term future that was much more connected their European and Asian operations. Ford came out of it in a very strong position,” James Bell, executive market analyst for Kelley Blue Book, told Auto Remarketing.

Ford found that its 2010 full-year net income came in at $6.6 billion or $1.66 per share. The amount represented an increase of $3.8 billion, or 80 cents per share from 2009.

Ford insisted it was its highest net income in more than 10 years, explaining that strong products and new investments fueled improvements in all of the company’s business operations around the world.

“Our 2010 results exceeded our expectations, accelerating our transition from fixing the business fundamentals to delivering profitable growth for all,” stated Alan Mulally, Ford president and chief executive officer.

“We are investing in an unprecedented amount of products, technology and growth in all regions of the world,” continued Mulally, whose company moved 5.3 million units worldwide last year — 771,000 more than in 2009.

The automaker determined full-year 2010 pre-tax operating profit came in at $8.3 billion or $1.91 per share. That performance showed an increase of $8.3 billion or $1.90 per share from the previous year.

“This increase reflects a profit in each automotive segment led by strong performance in North America, reflecting primarily favorable volume and mix as well as favorable net pricing,” company executives stated.

“Ford Credit’s strong profit also contributed significantly to Ford’s full-year performance,” they added.

Ford insisted that it made significant progress in strengthening its balance sheet, reducing automotive debt by $14.5 billion in 2010. That amount created a 43-percent debt reduction.

The automaker believes those actions will lower annualized interest expense by more than $1 billion.

Ford finished the year with automotive gross cash exceeding debt by $1.4 billion. The company said fourth-quarter actions reduced automotive debt by $7.3 billion, including $2.5 billion of newly announced debt reductions to pay down Ford’s revolving credit facility and term loans.

Ford also reported full-year revenue of $120.9 billion, an increase of $17 billion from a year ago excluding Volvo.

Executives pointed out the company generated positive automotive operating-related cash flow of $1 billion in the fourth quarter and $4.4 billion in the full year, an improvement of $5.2 billion from full-year 2009.

Ford said it finished the year with automotive gross cash of $20.5 billion and total automotive debt of $19.1 billion. Management indicated automotive gross cash was down $3.3 billion from the end of the third quarter as a result of significant debt-reduction actions.

As of Dec. 31, Ford noted its total automotive liquidity was $27.9 billion, including available credit lines.

“The progress that we made improving our core automotive business has allowed us to strengthen significantly the balance sheet in 2010, and this will remain a key area of focus for us in 2011,” stated Lewis Booth, Ford’s executive vice president and chief financial officer.

“We continue to manage the business for long term profitable growth,” Booth continued.

Ford’s Fourth Quarter Performance

Before going into more detail about how the company did throughout all of 2010, Ford offered details just about the fourth quarter.

Ford reported fourth-quarter net income of $190 million or five cents per share. The amount constituted a decrease of $696 million or 20 cents per share from the fourth quarter of 2009.

“This includes the negative impact of special items of $1 billion, primarily associated with a previously disclosed $960 million charge related to the completion of debt conversion offers that reduced outstanding automotive debt by over $1.9 billion,” Ford explained.

Executives noted that Ford’s pre-tax operating profit of $1.3 billion or 30 cents per share in the fourth quarter marked the sixth consecutive quarter of pre-tax operating profit. Though the streak continued, they conceded the fourth-quarter amount represented a decrease of $322 million or 13 cents per share from the year-ago quarter of 2009.

The company’s fourth-quarter automotive pre-tax operating profit came in at $741 million, a decrease of $173 million from a year ago. Management indicated fourth-quarter financial services pre-tax operating profit was $552 million, a decrease of $149 million from a year ago. That amount also included a pre-tax operating profit of $572 million for Ford Credit.

Ford determined its interests in North America posted a fourth-quarter pre-tax operating profit of $670 million, a $59 million increase compared with 2009.

Looking at fourth-quarter results on a global view, Ford’s worldwide revenue was $32.5 billion, an increase of $1.6 billion compared with the same period a year ago. However, that jump excluded Volvo from 2009.

The OEM reported that total vehicle wholesales in the fourth quarter totaled 1.4 million units, up 41,000 units from a year ago excluding Volvo from 2009.

“The increase was explained primarily by higher wholesales in Asia Pacific Africa, offset partially by lower wholesales in Europe,” executives pointed out.

Litany of Company Milestones

As an introduction into specific performance metrics for its interests worldwide, Ford offered a long list of noteworthy achievements that occurred in 2010:

—Announced $850 million in future investments for Michigan-based engineering and manufacturing, leading to 1,200 jobs through 2013.

—Announced $600 million investment in Louisville Assembly and additional 1,800 jobs.

—Announced $630 million investment in Kocaeli, Turkey, for future Transit production.

—Launched 2011 F-150 lineup with completely new fuel-efficient engines.

—Unveiled all-new global Ford Ranger at the Australian International Motor Show.

—2011 Explorer awarded North American Truck of the Year at the North American International Auto Show.

—New Figo won Society of India Auto Manufacturers 2011 Indian Car of the Year.

—The redesigned Explorer and new Fiesta earned IIHS Top Safety Picks in the U.S.; C-MAX and Grand C-MAX earned Euro NCAP five-star safety ratings.

—Increased U.S. sales 15 percent in the fourth quarter. For the full year, Ford had the first back-to-back market share increase since 1993, and the largest sales percentage increase of any full-line automaker

—Ford of Canada reported an 11 percent sales increase in the fourth quarter, leading Ford of Canada to finish 2010 as best-selling automaker for the first time in more than 50 years.

—Ford Brazil sales increased 24 percent in the fourth quarter, leading to a market share gain of three-tenths of a point.

—European market share fell in the fourth quarter and full year as a result of Ford’s decision to reduce participation selectively in low-margin business, as well as the end of the favorable effect of scrappage programs on its small car sales.

—Sales increased 35 percent in Asia Pacific and Africa in the fourth quarter. In 2010, the region reported record full year sales in China and India, with 32 and 168 percent increases respectively

Ford Global Performance Report

The automaker turned next to a report about how each of its major global regions performed during the fourth quarter and for all of 2010.

Looking first at North America during the fourth quarter, Ford noted that this region reported a pre-tax operating profit of $670 million, compared with a profit of $611 million a year ago.

“The increase reflects favorable net pricing, higher industry volume, favorable mix, market share improvements, and favorable exchange,” executives reiterated.

“These were offset partially by the non-recurrence of prior-year stock increases, higher structural costs to support product launches and growth, higher commodity costs and costs associated with the recently announced Windstar field service actions,” they added.

Ford pointed out its fourth-quarter revenue in North America was $17.2 billion, up from $15.6 billion a year ago.

For the full year, Ford’s North American region generated a pre-tax operating profit of $5.4 billion, compared with a loss of $639 million a year ago.

“The improvement primarily reflects favorable volume and mix, net pricing, and exchange, offset partially by higher structural costs to support higher volume and product launches,” Ford stated.

As a result of Ford’s 2010 financial performance, the company said it will pay profit sharing to approximately 40,600 eligible U.S. hourly employees. The average amount is expected to be approximately $5,000 per eligible full-time employee.  

Moving along to South America, Ford calculated that its interests here reported a pre-tax operating profit of $281 million in the fourth quarter. In the year-ago quarter, the figure was an operating profit of $369 million.

The decrease was more than explained by higher commodity and structural costs, offset partially by favorable net pricing,” Ford insisted.

Also in South America, Ford’s fourth-quarter revenue rose to $2.8 billion, up from $2.6 billion a year ago. 

For the full year, Ford found that its South American operations created a pre-tax operating profit of $1 billion, compared with a profit of $765 million a year ago.

“The increase was more than explained by favorable net pricing, exchange, and mix, offset partially by higher commodity and structural costs,” executives again offered.

Switching over to Europe, Ford determined that its properties on that continent sustained a pre-tax operating loss of $51 million during the fourth quarter. A year ago, the same entities boasted a profit of $253 million.

“The decline was more than explained by lower market share, higher structural costs to support product launches, higher commodity costs, and lower industry volume, offset partially by favorable exchange and mix,” the automaker emphasized.

“The lower market share primarily reflects Ford’s decision to reduce participation selectively in low-margin business, as well as the end of the favorable effect of scrappage programs on its small car sales,” OEM officials added.

Furthermore, Ford determined its fourth-quarter revenue in Europe ticked down to $8.1 billion from $8.2 billion a year ago.

“Compared to Ford’s most recent guidance for Europe, the fourth-quarter result was lower than expected, reflecting primarily lower market share driven by actions to maintain margins,” the automaker conceded.

For the full year, Ford Europe reported a pre-tax operating profit of $182 million, compared with a loss of $144 million a year ago.

“The improvement primarily reflects the non-recurrence of prior-year stock reductions, lower material and warranty costs, higher parts and services profits, and favorable mix,” the manufacturer said. “This was offset partially by lower market share and higher structural costs.”

Looking next at Ford’s Asia Pacific Africa performance in the fourth quarter, the company’s interests there posted a pre-tax operating profit of $23 million, compared with a profit of $16 million a year ago.

Like other regions, Ford pointed out “the increase is more than explained by higher volume, offset partially by unfavorable mix.”

The region’s fourth-quarter revenue — which Ford said excludes sales at unconsolidated China joint ventures — was $2.2 billion, up from $1.7 billion a year ago. 

For the full year, Ford’s Asia Pacific Africa ventures reported a pre-tax operating profit of $189 million, compared with a loss of $86 million a year ago.

“The improvement primarily reflects higher volume, and lower material, freight and warranty costs, offset partially by higher structural costs to support investment in Ford’s product and growth plans and unfavorable mix,” executives mentioned.

Finally in other automotive initiatives, Ford suffered a fourth-quarter loss of $182 million. Though still negative, the mark was better than a year ago when Ford was saddled with a loss of $295 million in this area.

“This improvement primarily reflects favorable fair market value adjustments related primarily to our investment in Mazda and lower net interest expense,” Ford executives explained.

Financial Services Performance

Also included in Ford’s extensive performance report was an update on how its financial service sector did.

For the fourth quarter, Ford indicated its financial services sector reported a pre-tax operating profit of $552 million, a decline of $149 million compared with a year ago. 

Looking deeper at Ford Motor Credit, officials said this entity compiled a pre-tax operating profit of $572 million in the fourth quarter. In the year ago period, they calculated the profit amount was $714 million.

“The decrease reflects lower volume and the non-recurrence of lower lease depreciation expense related to lower gains as fewer leases terminated and the vehicles were sold,” Ford Credit management pointed out.

However for the full year, Ford Credit reported a pre-tax operating profit of $3.1 billion, marking a rise from the $2 billion profit figure compiled a year ago.

“The increase reflects primarily a lower provision for credit losses and lower depreciation expense for leased vehicles related to higher auction values,” officials surmised. “These were offset partially by lower volume and the non-recurrence of net gains related to unhedged currency exposure from intercompany lending.”

Ford’s Outlook for 2011

Ford reiterated that it remains focused on delivering the key aspects of the One Ford plan, which the company said are unchanged. These points include:

—Aggressively restructuring to operate profitably at the current demand and changing model mix.

—Accelerating the development of new products that customers want and value.

—Financing the plan and improving the balance sheet.

—Working together effectively as one team, leveraging Ford’s global assets.

Ford highlighted that 2010 marked a pivotal year since it launched 24 new or redesigned vehicles in key markets around the world. These units included the redesigned Explorer, the new Fiesta, as well as the redesigned Edge and Lincoln MKX in North America, the redesigned C-MAX and new Grand C-MAX in Europe and the new Figo in India.

The company also emphasized how it announced more than $9 billion in global investments for future growth, including $4.5 billion in North and South America, $2.9 billion in Europe and $1.7 billion in Asia Pacific Africa.

Executives believe their One Ford transformation should continue this year as Ford launches the new global Focus in North America, Europe and Asia Pacific Africa as well as the Focus Electric in North America later in 2011. They also mentioned the new global Ranger will hit markets in Asia Pacific Africa and Europe this year and the company will continue to expand the EcoBoost family of engines by offering it in additional markets and vehicles.

“Ford plans to build on its performance in 2010 with continued improvement in 2011 total company pre-tax operating profit and automotive operating-related cash flow,” the automaker declared.

“On a full-year basis, Ford expects each of its automotive operations to be profitable in 2011,” th company continued. “In addition, the automotive operating margin in 2011 is expected to be equal to or improved from 2010.”

Furthermore, the manufacturer also is expecting solid profitability for Ford Credit this year, although at a lower level than seen in 2010. Officials think the differential could reflect primarily on the non-recurrence of lease depreciation expenses and credit loss reserve reductions of the same magnitude as 2010.

At year-end 2011, Ford Credit is anticipating that managed receivables will be in the range of $80 billion to $85 billion. Ford Credit also is projecting distributions of about $2 billion during 2011.

Ford anticipates that U.S. full year industry sales volume will be in the range of 13 million to 13.5 million units and for the 19 markets Ford tracks in Europe in the range of 14.5 million to 15.5 million units, including medium and heavy trucks.

The company also expects its full year U.S. total market share and its share of the U.S. retail market as well as European market share to be equal to or improved from 2010.

Ford asserted that full-year automotive structural costs are expected to be higher as the company increases production to meet demand and makes further investments in new products, technology and growth. Management thinks commodity costs also should be higher this year, reflecting increased global demand.

Furthermore, Ford expects capital expenditures in the range of $5 billion to $5.5 billion as the company continues to invest in its product and growth plans.

“We expect continued improvement in 2011, driven primarily by our growing product strength, a gradually strengthening global economy and an unrelenting focus on improving the competitiveness of all of our operations,” Mulally declared.

“We are delivering on our commitments to serve our global customers with a best-in-class full family of Ford products and delivering profitable growth for all associated with Ford,” he went on to say.

Analyst Reaction to Ford’s Performance

Several industry analysts chimed in their assessment of how Ford’s progress reflected in its year-end financial report.

“Ford’s improvements have come from two main areas — product and technology,” said Jesse Toprak, VP of industry trends and insights for TrueCar.com.

“Alan came in and turned the company around with fuel-efficient, quality vehicles consumers like and technology such as the Ford Sync consumers wanted in their vehicles,” Toprak continued.

“Ford’s gained market share while lowering their incentive spend, which is a healthy sign for an automotive company. They took advantage of GM and Chrysler going into bankruptcy and Toyota’s quality issues,” he went on to say.

The analysts at Edmunds.com contend that simple economics provide at least part of the picture for why Ford had such a profitable year.

With a whittled-down workforce, Edmunds.com reiterated that Ford’s sales climbed 17.6 percent in 2010 compared with 2009. The site also mentioned the average transaction price rose 7.7 percent to $30,313 as True Cost of Incentives for Ford buyers fell 4.5 percent.

“Car buyers in general have grown more curious about what the company had to offer,” Edmunds.com pointed out.

By the end of last year, the site discovered that 18.1 percent of its visitors looked at a Ford model, making it the brand’s highest level of consideration ever at Edmunds.com It also was a dramatic increase from 13.5 percent consideration at the end of 2009.

Edmunds.com analysts also contend Ford’s success has also had an undeniable impact on its competition.

According to Edmunds.com’s cross-shopping metrics, every other automaker — from traditional competitors such as Chevrolet and Dodge — to luxury brands such as Audi and Mercedes-Benz — has had a noticeable increase in shoppers comparing their models to Ford vehicles in the last year.

“In 2010, Ford found a way to compete for the hearts and minds of car buyers across all segments,” explained Ivan Drury, an industry analyst at Edmunds.com.

“That’s a testament to the company’s product development and its aggressive marketing strategy,” Drury continued. “Ford has done a great job spreading the word about its technology and fuel economy improvements throughout its entire fleet, and those messages are resonating with consumers.”

One way Edmunds.com thinks Ford hopes to continue the momentum is with the newly redesigned Ford Explorer.

As Ford shifted its attention toward cars and crossovers in recent years, site analysts discovered the Explorer’s market share of the midsize SUV segment hit an all-time low in 2009 and 2010, hovering below 4 percent for the first time ever.

“That’s a far cry from the Explorer’s 12 percent share of the segment just five years ago, and the 44 percent share it earned when it was first introduced in 1990,” Edmunds.com pointed out.

In 2010, the site determined Explorers made up 3.6 percent of all of Ford’s total sales. That share is down significantly from its peak of 14.7 percent of sales in 2002.

A review of the 2011 Ford Explorer on Edmunds.com’s sister website, InsideLine.com, declared that the model has reinvented itself as a more carlike crossover vehicle with better handling and fuel economy.

Edmunds.com also believes that market conditions are ripe for the Explorer’s revival — the overall market share of midsize SUVs has climbed 30 percent in the last decade.

“Ford is coming back with a stronger product in a segment that’s taking a greater share of the overall automotive market,” Drury insisted.

“Our data show that consumers are now considering the Explorer much more than they have over the last few years,” he added.

Meanwhile, James Bell, executive market analyst for Kelley Blue Book, touched on some points also noted by other industry analysts.

“Now of course, Ford still has quite a bit of debt to pay back,” Bell told Auto Remarketing. “Sure they didn’t take money from the government but they did mortgage the house if you will to come through that. Their roll of the dice has absolutely paid off. They’ve done what we in the industry have been screaming at for years.”

With such a positive performance coming out of 2010, Bell speculated about what could be ahead for Ford this year.

“We’re going to see them to prepare for higher CAFE regulations that are coming in the next few years,” Bell surmised. “Probably Ford is paying closer attention to those new standards than many of the manufacturers because of their previous reliance for profit from large vehicles like the F-150 and various SUVs.

“Of all brands, Ford probably was caught out the furthest in the field when the market shifted from using vehicles like the F-150 as commuter vehicles to now people buying them if they need them for work or an actual tool instead of being just a fashion statement,” Bell continued.

“In 2011, obviously they need to sell F-150s because it is a good profit center for them. But I think we’re going to see them turn the heat up on some more fuel-efficient vehicles as well as further electrification. This will all be needed to balance out future ability to sell pickups and SUVs when the CAFE standards are much higher,” he went on to say.

Like analysts from Edmunds.com. Bell mentioned that shopper consideration for Ford vehicle has grown steadily at KBB.com. He called it a “good harbinger” for what the automaker’s retail performance could be.

And also while Edmunds.com concentrated on prospects for the new Ford Explorer, Bell chose to discuss another upcoming model that could propel the OEM to more solid returns.

 “We’re expecting to see some good interest in the new Ford Focus, which will be going on sale in the next few months,” Bell stated. “That’s a vehicle that’s so important to Ford in order to meet future higher fuel economy standards. I think that vehicle is going to be receiving a lot of promotion and marketing.”