Ford Motor Co. reported a pre-tax profit this week of $1.7 billion in 2012, compared to $2.4 billion in 2011. The company explained the decline in press release issued this week.
Click here to view the full release or to download the full fourth quarter 2012 credit release.
Ford claims the decrease in pre-tax earnings is because of fewer lease terminations, which in part resulted in fewer vehicles sold at gain and lower financing margin as higher yielding assets according to Ford.
The company's Credit net income was $1.2 billion in 2012, down from $1.8 billion the previous year.
In the fourth quarter of 2012, the company's pre-tax profit was $414 million, a decrease of approximately $92 million from 2011. The decrease in pre-tax earnings is due to lower credit loss reserve reductions and lower financing margins according to Ford.
"Our 2012 results were solid, and we expect another strong performance in 2013," Ford Credit Chairman and CEO Bernard Silverstone said in the press release. "We will remain focused on providing unparalleled support and service for Ford, our dealers and our customers."
On Dec. 31, Ford's Credit's net receivables totaled $90 billion, which increased from $83 billion at year-end compared to 2011. Managed receivable were $91 billion last year, up from approximately $85 billion.
In 2013, the company projects a full year pre-tax profit about equal to the year before. They also project managed receivables at the end of the year to range between $95 billion to $105 billion, and managed leverage to continue in the range between 8:1 and 9:1.
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