Business
Ford Projects $8bn Operating Profit In 2011
Ford Motor Company is expected to post its biggest annual profit in a decade on recently, after lowering operating costs and increasing sales to make it Number two in the United States market, newsmen.
Ford’s anticipated annual operating profit of about $8bn would be its best showing since a $10.2bn profit in 2000, when US industry auto sales were 33 per cent higher.
Making profit at a lower sales volume has been one of the keys to the company’s strategy since Chief Executive Alan Mulally, arrived in October 2006.
It is the second straight year of profit for Ford, which showed a loss of $30bn from 2006 to 2008.
Mulally and Executive Chairman, Bill Ford, said that now the company has gone from fighting for its survival to expanding profitably around the globe.
Investors will look on for updates from Ford executives on steps toward a return to an investment-grade credit rating, which it has not had since May 2005.
Ford cut its net automotive debt in 2010. After it paid debt to a retiree health care trust fund for the United Auto Workers, its key automotive operations had a debt of $22.8bn and cash of $20.3bn.
The company said it will be profitable in 2011, but at a lower level than 2010.
Ford has not forecast when it would return to investment grade. Ratings agencies have raised its grade recently as Ford’s debt has fallen, but it remains two notches below investment grade.
The reshaping of Ford was funded by mortgaging most of the company’s assets to borrow $23.5bn. The move allowed Ford to finance new product development while not having to accept the life-saving government bailouts taken by its US rivals General Motors Company and the Chrysler Group.
Analysts expect the company to show a quarterly profit of 48 cents per share, according to 17 analysts polled by reporters. That would mean a quarterly profit near $1.7bn on revenues of $30.57bn and an annual profit near $8bn.
The range of estimates is from a high of 58 cents per share and a low of 36 cents per share.
Ford’s US sales grew 19.5 per cent in 2010, versus an industry that grew by 11 per cent.
Morningstar analyst David Whiston said he will be watching Ford’s 2011 forecast closely for signals of the automaker’s expectations for commodity prices that could increase sticker prices for its models. He’s also looking to see how high Ford thinks gasoline prices will rise in 2011.
“Can Ford meaningfully grow its car model mix should gas prices rise,” is a key question, said Whiston. “I know they’ve made strides by introducing new small cars like the Focus and the Fiesta, but their US sales are still skewed toward trucks.”
Ford’s US sales of 1.93 million for 2010 were 64 per cent trucks, which include SUVs. Overall, US auto industry sales were about half cars and half trucks in 2010.
“Payment of tuition fees for undergraduate/postgraduate studies shall be subject to a maximum limit of $25,000.00 per semester,” the Manual states.
The expansion of international card limits also reflects growing confidence among lenders that foreign exchange liquidity has improved enough to support retail dollar transactions.
Speaking recently at the BusinessDay 14th Annual CEO Forum in Lagos, CBN Olayemi Cardoso, governor of the CBN said buying and selling activities now increasingly determine outcomes in the foreign exchange market, unlike in the past when market participants relied heavily on routine Central Bank interventions.
According to Cardoso, Nigeria’s net foreign exchange reserves have risen from just over $3 billion at the start of the reform programme to more than $40 billion, while gross reserves have climbed to about $52 billion, providing stronger confidence for investors and enabling the Central Bank to reserve interventions for periods of market stress rather than day-to-day liquidity management.
The restoration and expansion of international naira card spending limits are increasingly being seen as one of the clearest signs that the benefits of the CBN’s foreign exchange reforms are beginning to reach households, students and businesses making legitimate cross-border payments.
The Secretary-General and Chief Executive Officer, WEC, Dr Angela Wilkinson, disclosed this in a statement, last Thursday.
“Nigeria’s participation comes at a pivotal time as the country seeks to expand energy access, strengthen energy security, accelerate gas development and mobilise the capital required for industrialisation and sustainable economic growth.
“WEC Nigeria will convene leaders from across the energy ecosystem, apply the WEC’s globally recognised Energy Trilemma framework to Nigeria’s unique context, and promote evidence-based dialogue, practical collaboration and informed policymaking.
“It will also ensure that Nigerian and broader African perspectives contribute meaningfully to global energy conversations,” she said.
Wilkinson expressed confidence that Nigeria would play a significant leadership role at the World Energy Congress scheduled for Riyadh in April 2027 and beyond.
The statement also quoted the Chairman of WEC Nigeria, Isa, as describing the country’s participation as an opportunity to deepen national and African leadership within the global energy community through practical solutions tailored to regional development priorities.
He said the platform would promote collaboration across sectors and attract sustainable investments into Nigeria’s energy sector.
The Chief Executive Officer of WEC Nigeria, Wunti, was quoted in the statement as saying that the council would connect leadership, evidence and investment to build a secure, affordable and sustainable energy system.
“This system will be capable of driving economic growth and shared prosperity.”
According to him, the platform will also connect Nigerian institutions and businesses with international knowledge, technology, partnerships and investment opportunities through the World Energy Council’s global network.
Recall that WEC, founded in 1923, is the world’s oldest independent and impartial community of energy leaders and practitioners, advancing informed, collaborative and practical action across the global energy system.