DETROIT -- Ford Motor Co. lost US$1.28 billion last year as it dealt with a huge restructuring, a costly recall and a decline in the value of its pension fund.
But the company said Thursday it is generating strong cash flow and will go all-in on electric vehicles. Ford said it would now spend at least $22 billion developing them from 2016 through 2025, nearly double what it previously announced.
The automaker said that excluding one-time items, it made 41 cents per share for the year. That beat Wall Street estimates of breaking even. Revenue for the year was $127.1 billion, down 18% from 2019. Analysts expected $128.2 billion in revenue for the year.
Ford also lost $2.8 billion in the fourth quarter. Excluding one-time items it made 34 cents per share, according to FactSet. That also beat Wall Street expectations of a 7-cent-per-share loss.
Before taxes the company made $1.7 billion for the year, but it was brought down by restructuring costs in Europe, South America and elsewhere. Also contributing were a $610 million government-ordered recall of 2.7 million vehicles with dangerous Takata air bag inflators and a $1.2 billion one-time accounting charge for falling pension-fund values.
The company predicted a return to more normal profits in 2021, forecasting $8 billion to $9 billion in pretax earnings. That includes a $900 million gain on its investment in electric vehicle startup Rivian, as well as any adverse impact from a shortage of semiconductor chips now hitting the global auto industry.
Ford said that despite the annual loss, it generated $1.9 billion in free cash flow in the fourth quarter, giving it a year-end cash balance of nearly $31 billion to help its investment in electric vehicles.
Despite the increased electric vehicle investment, Chief Financial Officer John Lawler stopped short of matching rival General Motors' goal of selling only all-electric light vehicles by 2035.
Lawler said the company is focused on bringing EVs to market quickly. The company's electric Mustang Mach E SUV is already on sale, it expects to start selling an electric Transit full-size van this year and an all-electric F-150 pickup next year, he said.
"We're focused on making a difference now," Lawler said.
In North America, by far Ford's most profitable region, the company made $1.1 billion before taxes, up 53%. That was due largely to the cost of putting a new United Auto Workers union contract in place in 2019. Union workers will get profit-sharing checks of about $3,625 each in March, based on the North American profits.
CEO Jim Farley said the company is preparing to make sure it has enough leading-technology battery cells as it rolls out more electric vehicles in an increasingly competitive marketplace.
Ford, he said, doesn't want to be in a situation like the auto industry is now in with a shortage of semiconductors. He said Ford can develop battery cells on its own or go into a joint venture, and said an announcement would be coming.
"We get it. We want to lock it up. We want to make sure it's not constrained," Farley said.
Ford announced its results after the markets closed on Thursday. The company's shares rose just under 1% in after-hours trading to $11.48.
