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US sales keep Ford profitable

30/01/2012

US car manufacturer Ford has seen their profits surge in 2011, thanks to strong sales in America and a one-off payment.

The company have reported a net income of $20.2bn (£12.9bn) during 2011, a $6.5bn (£4.1bn) increase on 2010. Between October and December there was also an increase in profits to $13.6bn (£8.6bn), up from only $190m (£120m) the previous year.

"2011 marked a milestone year in our work to strengthen our balance sheet," Ford said in a statement.

However, the bulk of the profits in this final quarter came from a one-off $12.4bn (£7.9bn) non-cash special gain, which had been marked against the value of deferred tax assets.

Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers told the BBC this payment is a sign of confidence in the company: "It could be argued that the decision to book the tax profit now equates to management confidence in prospects for the company."

However outside of the US, Fords fortunes have not been as favourable. The iconic car maker's entire operating profit fell to $1.1bn (£699m) during the last quarter of 2011 from $1.3bn (£826m) a year earlier.

Ford chief executive Alan Mulally told the BBC floods in Thailand had hampered Asia-Pacific production. Despite this setback, Mr Mulally said he is "very positive about [future] growth" in the region. He also said production was to be scaled back in Europe due to lower demand.

Where American motorists and car insurance policy owners have been buying new models, Europeans haven't and production has been faltering as a result of debt crisis and slow growth. Their fourth quarter sales fell by 6,000 to 391,000 vehicles, recording a loss as a result.

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