Profitable Ford to Boost Dividend 33%, Split Stock
Ford Motor, dividing up the returns from a year in which it is likely to be the nation’s most profitable company, approved a 2-for-1 stock split Thursday and boosted its dividend by one-third.
The dividend was raised to $1 a share from 75 cents and will be paid before the split.
In making the announcement, Ford Chairman Donald Petersen and President Harold Poling cited the company’s strong gains in profit in recent years. “The improved earnings came from many areas of Ford, including automotive operations in North America and Europe and our financial services business,” Poling and Petersen said in a statement.
Could Be No. 1
Ford’s success with its Taurus and other restyled models pushed its profit above that of rival General Motors last year for the first time since the 1920s. Profit has continued to rise in the current year, making it possible that it will earn more than any other American company, surpassing the recent top earners Exxon, International Business Machines and General Motors.
Ford earned $3 billion in the first half of 1987, an increase of 65% over the same period in 1986.
Ford noted that the stock split reflects “our confidence in the company’s future performance and, if approved by the stockholders, should broaden interest in Ford stock by reducing its price.”
After the news, Ford stock rose initially by about $1 but then fell as the stock market as a whole declined. It closed at $94.50, down 87.5 cents for the day.
Shareholders will have to approve the stock split by voting to increase the number of authorized shares. The additional shares resulting from the split will be distributed Jan. 12, 1988, to stockholders of record as of Dec. 10. The dividend increase is payable Dec. 1 to stockholders of record Nov. 2.
Ford Memorial Held
Meanwhile, the company held a memorial service Thursday for Henry Ford II, who is credited with bringing the company founded by his grandfather, back from the brink of bankruptcy in the 1940s and turning it into a modern auto maker. He died Sept. 29 at the age of 70.
The world’s No. 2 car company stopped all operations for three minutes Thursday in a final memorial gesture.
Henry Ford II, who had been inactive in the company in recent years, died of pneumonia. His body was cremated after a private funeral last Friday at a church in Grosse Pointe, a Detroit suburb.
“The family to which he devoted himself was not just the Ford family but all the people who worked for the Ford Motor Co.,” his younger brother, William Clay Ford, told 900 friends and associates Thursday during the service in St. Paul Episcopal Cathedral here.
The memorial service was beamed to more than 200 of the corporation’s plants and offices in the United States, Canada and Mexico through the company’s internal television network.
The solemn mood during the stately liturgy changed to a festive note as a New Orleans jazz band broke into the upbeat strains of “When the Saints Go Marching In” and led mourners from the church. The mixing of hymns and Bible readings with Dixieland jazz was the kind of memorial Ford asked for, relatives and friends said.
