American automobile manufacturer, Ford Motor Co. finished 2016 with a $10.4 billion pre-tax profit, down slightly from record results in 2015, after posting a fourth-quarter net loss mainly because of accounting changes,
Fourth-quarter pre-tax profit was $2.1 billion, down $500 million due to a North American reduction in inventory and unfavorable conditions in the Middle East and Africa, and Asia Pacific. Its fourth-quarter net loss of $800 million compared with a $1.9 billion profit a year earlier, the company said in a statement.
Ford took a $3 billion fourth-quarter hit because of the way it accounts for pensions and a $200 million charge for canceling its small car plant in San Luis Potosi, Mexico, a move that followed criticism from then President-elect Donald Trump. The automaker said it doesn’t expect any additional charges related to the aborted facility.
The automaker’s full-year net income of $4.6 billion was down $2.8 billion from 2015. For the full-year, Ford posted an automotive operating margin of 6.7 percent. Its total company revenue of $151.8 billion was up $2.2 billion from a year ago.
“This underscores the substantial progress we are making in expanding our business to be an auto and a mobility company,” CEO Mark Fields said in the statement.
Ford did not reveal its revenues from mobility services.The company’s shares fell 3.3 percent to close at $12.37 on Thursday, Automotive News reports.
Ford’s 2016 earnings were driven by a strong performance in North America, where it posted a $9 billion pre-tax profit, down $344 million from last year’s record earnings. It posted a 9.7 percent operating margin in the region, driven by strong pricing for some of its most profitable vehicles, including its F-Series trucks and SUVs.
Ford posted a record $1.2 billion pre-tax profit in Europe, including a record 4.2 percent operating margin. Despite concerns over the U.K.’s recent vote to leave the European Union, continued struggles in Russia, and launches of the Fiesta and EcoSport, the automaker expects to make its third consecutive profit in Europe in 2017, although it projects that the numbers will fall from 2016.