Ford Motor Co. said Friday that it expected 2003 earnings well above analyst estimates, mostly because of cost controls, even as it warned of $270 million in pension expenses after recording a gain from the pension plan last year.
Ford's estimate of 70 cents a share, compared with an average analyst estimate of 46 cents, sent shares of the world's second-largest automaker up sharply. Although the gap between Ford's U.S. pension liabilities and assets grew to $7.3 billion last year, Ford said it was still on track to earn $7 billion in annual pretax profit by mid-decade.
In a meeting with analysts at Ford's Dearborn, Mich., headquarters, Chief Executive William Clay Ford Jr. said the company was speeding up its cost-cutting programs.
"When we look beyond 2003, a number of external factors are converging to make it imperative we accelerate our actions," he said. "The bottom line is we have to move faster and we will."
Chief Financial Officer Allan Gilmour said Ford's automotive unit would have break-even profit and cash flow in 2003, despite the massive launch of the new F-Series pickup truck.
Standard and Poor's warned in October that if Ford failed to get at least break-even results from its automotive unit in 2003 it could face a further downgrade in its credit ratings, which are hovering at a record low just two notches above "junk" status.
Gilmour also said the company had made about $2.2 billion in cost cuts outside of vehicle development in 2002.
Ford shares closed up 27 cents at $10.50 on the New York Stock Exchange.