Ford execs have reason to smile, with analysts also predicting profitability in less than two years
Not so very long ago, CEO Alan Mulally said that Ford wouldn't be "solidly profitable" until 2011, but investors will be happy to learn that the company just posted a profit from the fourth quarter of 2009 and a net gain for all of last year.
Last January, Ford put down a $5.9 billion loss for Q4 of 2008, which contributed to a whopping $14.8 billion loss for the year. But twelve long, painful months later, the tide has turned: Ford saw a net gain of $868 million in Q4 of 2009, and the company finished the year $2.7 billion in the black. In a prepared statement, Mulally said, "While we still face significant business environment challenges ahead, 2009 was a pivotal year for Ford and the strongest proof yet that our One Ford plan is working and that we are forging a path toward profitable growth by working together as one team, leveraging our global scale."
This represents a remarkable turnaround for Ford and breaks a three-year losing streak, during which the company racked up $30 billion in losses. The reversal is doubly remarkable in light of the auto industry's 21% sales slump in 2009, which Ford managed to weather closer to 15.4%. Mulally expects the company to be profitable in 2010, too -- thanks in part to its positive public perception (due to quality improvements on its vehicles and Ford's refusal of bailout dollars) and also to the launch of highly anticipated vehicles like the 2011 Ford Fiesta. To be sure, Ford still has a substantial amount of debt to pay off, but if sales keep edging forward and if the company continues to focus on core activities via its One Ford plan, we would expect Ford to remain in the black for some time.
If you'd like a closer look at the numbers, you'll find Ford's full press release here.