Ford’s Q4 Profit Drops 90%, CEO Promises Improved Execution

DETROIT (AP) – Net income for Ford Motor Co. fell 90% year-over-year in the fourth quarter as shortages of computer chips and other parts slowed down factories and cut car sales.

The Dearborn, Michigan automaker said it made $1.26 billion from October to December with revenue up 17% to $44 billion. The company’s adjusted earnings were 51 cents per share, below Wall Street estimates of 62 cents.

However, quarterly revenue topped estimates of $41.39 billion, according to analysts polled by FactSet.

Ford’s sales in the US, its most profitable market, fell 5% in the fourth quarter as the company, like other automakers, was hit hard by parts shortages.

CEO Jim Farley said in a statement that the company should have performed better last year and it left $2 billion in profits on the table that were in its control. He said Ford will fix that by improving performance this year.

Ford’s performance comes amid rising interest rates and declining car sales in general. The Federal Reserve raised its key rate from 0.25% on Wednesday to a range of 4.5% to 4.75% as it continues to fight stubborn inflation. According to Edmunds.com, the increase will almost certainly lift the average new car loan rate above the 6.9% in January, making it more expensive to buy cars.

High prices for Ford vehicles helped offset the drop in sales. In the fourth quarter, customers paid an average of $56,143 for company vehicles, up about 10% from the previous year. Many of these sales were expensive trucks and SUVs.

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