Manufacturing probably grew at a faster pace in January, a sign the industry will lead the U.S. expansion early this year, economists said before today
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An accounting change boosted Ford’s fourth-quarter net income, but without the gain the company fell short of Wall Street’s expectations.
Weak sales in Europe and lower production in Thailand eroded Ford’s profits.
Investors punished the stock in pre-market trading, where shares fell nearly 5 percent to $12.14.
Ford earned $13.6 billion in the fourth quarter, due to a decision to move deferred tax assets back onto its books. Without that change, the company’s pre-tax operating profit totaled $1.1 billion, or 20 cents per share, missing analysts’ forecasts of 25 cents.
The company lost money in Europe and Asia in the fourth quarter. But its North American operating profit rose 33 percent to $889 million.
“The quarter was really driven by North America,” Chief Financial Officer Lewis Booth said.
Booth also said November flooding in Thailand, which affected its parts suppliers, had a greater impact than the company expected. Ford lost 34,000 units of production in Thailand and in South Africa, which relies on Thai-made parts. He said the company also saw higher costs for steel and other commodities. Ford spent $2.3 billion more on commodities in 2011 than the prior year, or $100 million more than it had forecast.
Europe’s debt crisis weighed on car sales in that region.
For the full year, the Dearborn-based company made $20.2 billion, or $4.94 per share. Without the accounting gain, it earned $8.76 billion, or $1.51 per share, its highest operating profit since 1999. Full year revenue rose 13 percent to $136.3 billion.
Analysts had forecast full-year earnings of $1.86 per share on revenue of $127.31 billion.
Based on its full-year North American results, Ford said it will make profit-sharing payments of around $6,200 each to its 41,600 U short term personal loans.S. hourly employees. Employees will get their checks in March.
Ford moved $15.7 billion worth of tax credits and other assets off its books starting in 2006 because it wasn’t making money so it couldn’t take advantage of them. The company moved most of them back onto its books in the fourth quarter because it anticipates using them now that it’s profitable.
The change will affect Ford’s tax rates going forward. Ford’s tax rate was 9 percent in 2010 because of the assets that were being held in the valuation allowance account. Ford’s new rate will be closer to 30 percent.
Booth said the change is a strong indication that the company expects to remain profitable. Another is Ford’s decision last month to reinstate a 5-cent quarterly dividend starting in March.
But Booth said the international climate remains turbulent. Ford is trying to hold the line on incentive spending in Europe, but that could cost some sales. He doesn’t expect Asia to be a solid contributor to profits for several more years, as the company tries to expand there. The South American market is also getting more competitive, he said, and Ford’s products there are older than some new entries.
Ford is cutting European production in the first quarter by 36,000 vehicles because of weak sales. It’s also making smaller production cuts in Asia and South America, but is increasing production in North America by 18,000 vehicles.
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A government watchdog says U.S. taxpayers are still owed $132.9 billion that companies haven’t repaid from the financial bailout, and some of that will never be recovered.
The bailout launched at the height of the financial crisis in September 2008 will continue to exist for years, says a report issued Thursday by Christy Romero, the acting special inspector general for the $700 billion bailout. Some bailout programs, such as the effort to help homeowners avoid foreclosure by reducing mortgage payments, will last as late as 2017, costing the government an additional $51 billion or so.
The gyrating stock market has slowed the Treasury Department’s efforts to sell off its stakes in 458 bailed-out companies, the report says. They include insurer American International Group Inc., General Motors Co. and Ally Financial Inc.
If Treasury plans to sell its stock in the three companies at or above the price where taxpayers would break even on their investment _ $28.73 a share for AIG, $53.98 for GM _ it may take a long time for the market to rebound to that level, the report says. AIG’s shares closed Wednesday at $25.31, while GM ended at $24.92. Ally isn’t publicly traded.
It will also be challenging for the government to get out of the 458 companies as the market remains volatile and banks struggle keep afloat in the tough economy, it says.
Congress authorized $700 billion for the bailout of financial companies and automakers, and $413.4 billion was paid out. So far the government has recovered about $318 billion. The bailout is called the Troubled Asset Relief Program, or TARP.
“TARP is not over,” Romero said in a statement. She said her office will maintain its commitment to protect taxpayers for the duration of the program.
Treasury spokesman Matt Anderson said the department “has made substantial progress winding down TARP and has already recovered more than 77 percent of the funds disbursed for the program, through repayments and other income.”
“We’ll continue to balance the important goals of exiting our investments as soon as practicable and maximizing value for taxpayers,” Anderson said.
The government has unwound its investments in four of the companies that received the most aid: Bank of America Corp., Citigroup Inc., Chrysler Group LLC and Chrysler Financial, the automaker’s old lending arm.
On Wednesday, Treasury announced that it had sold the final batch of securities under its $368 million Small Business Administration loan program under TARP.
In Romero’s quarterly report to Congress, she said her office has uncovered and prevented fraud related to TARP. Investigations by her office have resulted in criminal charges against 10 people and three convictions, the report notes.
Fiat SpA (F), PSA Peugeot Citroen (UG) and Renault SA (RNO) led a fourth consecutive year of car sales declines across Europe as consumer confidence fell and unemployment remained at record levels.
Registrations last year fell 1.4 percent to 13.6 million vehicles, propelled by a 5.8 percent drop in December, the Brussels-based European Automobile Manufacturers Association, or ACEA, said today in a statement.
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Ben Bernanke presided over his first meeting as Federal Reserve chairman in March 2006 believing the nation could achieve a “soft landing” from falling home prices. Three months later, Bernanke had begun to grasp that he and others might have underestimated the risk housing posed to the economy.
Newly released transcripts of Fed meetings during Bernanke’s first year as chairman show that, among Fed officials, he often expressed the most concern about housing. But no official, according to the transcripts, recognized the extent of the damage a housing bubble would cause Payday advance. A year later, its collapse helped send the nation into the worst recession since the Great Depression.
In fact, Treasury Secretary Timothy Geithner, then a Fed official, expressed confidence in September that “collateral damage” from housing could be avoided.
Thomas Jordan
The euro extended its decline against the dollar after French borrowing costs rose at a sale of bonds.
The 17-nation common European currency was 0.9 percent weaker at $1.2832 at 10:08 a easy to get unsecured personal loans.m. London time.
Chalk it up to the holiday spirit — or just smart tax planning — but charitable giving is looking up this month.
Giving in December is already up 15% from 2010, according to the latest tally by Network for Good, a site that enables donors to contribute to more than 10,000 charities across the country. In November, donations rose 20% over the same month last year.
"This year looks a little better, but not back to pre-recession levels yet," said Katya Andresen, Network for Good’s chief strategy officer.
But the best is yet to come. While one-third of all online giving for the year occurs in December, a whopping 22% happens in the last two days of the year, according to Network for Good’s online giving study. That end-of-year rush can mainly be attributed to donors looking for some last-minute tax savings.
"It’s traditional to think about charity in December and of course, it’s the end of the tax year," Andresen said.
Still, with less than 48 hours left in the calendar year, it’s unlikely this will be a substantially better year for charities after three years in a row of lackluster giving.
Largest donations of 2011
After sinking in 2008 and 2009, donations still lag far behind pre-recession levels. Total charitable contributions from individuals, corporations and foundations increased slightly in 2010 to $290.9 billion — but remained below 2007’s $310.6 billion, according to Giving USA, a foundation that tracks charitable contributions cash advance loans.
Although Geoffrey Brown, executive director of the organization, says it’s still too early to say how 2011 will fare in comparison to last year, "giving is probably going to be flat, if anything," he noted.
Stagnant wage growth, high unemployment, Europe’s debt crisis and uncertainty about the economy have weighed on donors, while the government has drawn down support substantially, explained Daniel Borochoff, president of the American Institute of Philanthropy.
"This year was a little better than last year, but, of course, last year wasn’t so good," he said.
In a survey by the Chronicle of Philanthropy, 54% of 152 organizations said they raised more money in November and during the first part of December than they had at the same time last year. Nearly 60% of charities predicted they would have an overall gain in donations in 2011, while 28% said donations would fall this year.
"This was a year in which there were certainly disasters both at home and abroad, but not at the scale that we have seen in the past," explained Stacy Palmer, editor of the Chronicle of Philanthropy.
"Even Japan giving was small, it was nothing like the crisis in Haiti," she said referring to the earthquake and tsunami that rocked the Asian nation in March.
Laclede Group Inc. said fiscal third-quarter profit more than tripled on improved performance at the company’s gas utility and the sale of propane inventories.
Net income for the three months ended June 30 rose to $15.4 million, or 65 cents a share, from $4.4 million, or 20 cents, in the same period last year, the St. Louis-based company said. Sales rose 6 percent to $344.3 million.
Earnings rose by $11.6 million at Laclede Gas, the utility that sells natural gas to 630,000 customers in St faxless payday advance. Louis and surrounding Missouri counties.
The utility said it benefited from a rate increase that took effect in September as well as the sale of propane inventories no longer needed to serve customers.
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