Motoring
Ford posts higher profit but faces pressure in U.S.
NEW YORK – Ford Motor Co (F.N) reported higher-than-expected quarterly results on Tuesday as earnings in its core North American market fell less steeply than Wall Street expected, but declining vehicle prices there raised concerns about 2014.
The No. 2 U.S. automaker also affirmed the 2014 profit outlook it presented to investors last month. Ford has described 2014 as a transition year that will test the strength of Chief Executive Officer Alan Mulally’s team and the company’s restructuring since he took over in 2006.
Guggenheim Securities analyst Matthew Stover said Ford’s first quarterly drop in North American vehicle pricing in five years was ominous.
“It sort of foreshadows what we will see in 2014,” he said. “North America is going through a churn, and international operations are not going to be strong enough to offset that.”
Ford said last month that vehicle pricing in the U.S. market would be “slightly unfavorable” in 2014. That combined with the cost of introducing new vehicles and a deteriorating Venezuelan economy would dent its profit this year, the company said.
The news at the time sent Ford’s shares to their biggest one-day percentage drop in more than two years.
However, the stock regained ground after Mulally quashed speculation earlier this month that he would leave Ford for the top job at Microsoft Corp (MSFT.O). He has emphasized that he remains engaged in the company’s day-to-day operations as well as setting long-term strategy.
On Tuesday, shares of Ford were unchanged at $15.71 in morning trading.
Ford’s net income in the fourth quarter rose to $3 billion, or 74 cents a share, from almost $1.6 billion, or 40 cents a share, a year earlier.
The results included a $2.1 billion gain from the addition of deferred tax assets to the balance sheet, as well as charges of $311 million for last year’s pension buyouts and layoffs in Europe.
Excluding one-time items, Ford earned 31 cents a share, 3 cents more than analysts polled by Thomson Reuters I/B/E/S had expected. Analysts also attributed some of the outperformance to a lower-than-expected tax rate.
Revenue rose 4 percent to $37.6 billion, above analysts’ estimates of $35.17 billion.
In North America, Ford’s pretax earnings were $1.7 billion, a decline of $200 million, as vehicle pricing fell for the first time in five years due to increased competition. However, the profit was higher than expectations of $1.5 billion by RBC Capital Markets and $1.43 billion by Barclays.
Citi analyst Itay Michaeli said the pricing declines for the industry tended to hit small and mid-size cars and small crossover vehicles. However, pricing remains strong for larger SUVs and pickup trucks for now, he added.
Ford reported a wider-than-expected loss of $126 million for South America, compared with a year-earlier profit. Its $571 million loss in Europe, though smaller than the previous year, was still wider than analysts had expected. Earnings in Asia Pacific Africa surged more than 170 percent to $106 million.
BUSY YEAR
Ford’s 2013 pretax profit of $8.57 billion was the second-highest in the last decade, trailing only 2011’s $8.76 billion.
On Tuesday, Ford said it still expected a global pretax profit this year of between $7 billion and $8 billion, with lower auto operating margins.
The company has said 2014 will be the busiest launch year in its 111-year history, with plans to introduce 23 new vehicles globally, including 16 in North America.
Ford’s most-watched new vehicle will be the redesigned F-150 full-size pickup truck in the fall. The F-150 is the best-selling pickup in North America and is a big profit center for the company.
F-150 production will be down this year for 11 weeks at Ford’s truck plant in Dearborn and two weeks at a Kansas City, Missouri, factory to prepare for the new version, the company said.
Three of those shutdown weeks in Dearborn will occur in the first quarter, Ford Chief Financial Officer Bob Shanks told reporters.
Guggenheim’s Stover said Ford was more likely taking the down time in the first quarter to reduce inventory of the truck and not for the changeover to the new model.
Ford has reduced the weight of the new truck by using more aluminum than in the current models.
The company said its global pension plans were underfunded by $9 billion at the end of 2013, an improvement of $10 billion from the end of 2012 and $1 billion better than it had previously forecast.
Of the $9 billion pension shortfall, $6 billion was for plans the company does not have to contribute to in advance. Shanks said that meant Ford would have more cash to invest because it only had to fund $3 billion upfront.
Ford also said that because of its 2013 earnings, it would make record profit-sharing payments of about $8,800 per person to about 47,000 U.S. hourly employees.
– REUTERS
The Federal Capital Territory Administration (FCTA) has ended contracts with taxi rank and terminal operators due to their failure to meet engagement terms and conditions.
Mr. Ubokutom Nyah, the Mandate Secretary of the Transportation Secretariat, FCTA, made this announcement during a meeting with managers of these terminals and taxi ranks in Abuja.
Nyah clarified that due to the operators’ failure to fulfill their engagement terms, the FCTA had to terminate their contracts.
He instructed them to transfer control of the ranks to the Administration within three months, starting from Nov. 21.
He lamented the presence of unauthorized motor parks in the city and assured the readiness of the Administration to establish proper taxi ranks and terminals in the capital.
He revealed that personally visiting the city’s taxi ranks, terminals, and unauthorized motor parks gave him direct insight into the poor condition of these facilities.
He emphasized that as the federal capital city, Abuja deserves better, highlighting that the poor condition of these facilities attracts various criminal elements.
He said “We must rid Abuja of all these. I have gone round the taxi ranks, and of all the places I visited, not one is worthy to be called even a village motor park.”
The Mandate Secretary stressed that the intention wasn’t punitive; rather, it aimed to revamp the sector, introduce new engagement terms, and modernize taxi ranks and terminals in the federal capital.
He also highlighted the plan to increase the number of terminals and ranks where necessary, which would positively impact the administration’s revenue.
He emphasized that this measure was part of a broader effort to eliminate illegal motor parks in Abuja and curb the associated criminal activities.
In response, Mr. Adebisi Lawal, the Operator of Jahi Taxi Rank, praised the administration’s initiative to modernize the taxi ranks and terminals.
Lawal urged the administration to prioritize current operators’ involvement in the selection of new developers for the modernization of the taxi ranks and terminals.
It was a show of power at the Ojota area of Lagos on Monday as soldiers pummeled an officer of the Lagos State Traffic Management Authority, (LASTMA).
Eyewitness accounts claim that the ugly scene played out around 8am, and saw about eight soldiers pounce on the yet to identified LASTMA official, while his colleagues took to their heels.
The video of the melodrama has gone viral, where the LASTMA official was appealing to the soldiers, who appeared bent on ‘teaching him a lesson’.
This onslaught comes on the back of a reported assault of a soldier at the same location by LASTMA officials last week.
It would appear that what played out today was the army asserting its authority and defending their khaki as the armed soldiers carried out what looked like a revenge mission.
Eyewitnesses further averred that the victim was rushed to a nearby hospital, after the soldiers left the scene.
It was gathered that the authorities at LASTMA has reported the incident to the military authorities who are said to be looking into the matter.
Meanwhile many members of the public are rejoicing that the soldiers have taught the crude LASTMA official that power is stronger than power, for all their atrocities against motorists on Lagos roads.
The impact of the removal of subsidy on Premium Motor Spirit (PMS), otherwise known as petrol, has seen the pump prices of the product skyrocket with a corresponding increase in the cost commercial transportation in Nigeria.
According to the National Bureau of Statistics (NBS), intra-city bus transportation fares across Nigerian cities, measured between May and June 2023, increased from N649.59 to N1,285.41 in June 2023.
This translates to 98 percent growth or N635.82 within the month in view.
The NBS made the data available in its Transport Fare Watch report for June 2023.
In the report, the NBS also shared the breakdown of bus journeys within the cities per drop for constant routes; bus journey intercity (state route); charges per person, amongst others.
On a year-on-year basis, the report has it that bus fares rose by 120.63 percent from N582.61 paid by commuters in June 2022.
The average fare paid by commuters for bus journey intercity per drop rose to N5,686.49 in June 2023 compared to N4,002.16 in May 2023 indicating an increase of 42.09 percent, month-on-month.
The report read, “The average fare paid by commuters for bus journeys within the city per drop increased by 97.88 per cent from N649.59 in May 2023 to N1,285.41 in June 2023.
On a year-on-year basis, it rose by 120.63 per cent from N582.61 in June 2022.
“In another category, the average fare paid by commuters for bus journey intercity per drop rose to N5,686.49 in June 2023, indicating an increase of 42.09 on a month-on-month basis compared to N4,002.16 in May 2023.
“On a year-on-year basis, the fare rose by 55.25 per cent from N3,662.87 in June 2022.”
Biztellers reported that the twin forces of forex pressure and increasing price of Brent in the global market would likely see the pump prices of petrol, increased again in no distant time in Nigeria.
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