By Ben Klayman and Bernie Woodall
DEARBORN, Michigan (Reuters) - Ford Motor Co
The No. 2 U.S. automaker also affirmed the 2014 profit outlook it presented to investors last month. Ford has described 2014 as a transition year that will test the strength of Chief Executive Officer Alan Mulally's team and the company's restructuring since he took over in 2006.
Guggenheim Securities analyst Matthew Stover said Ford's first quarterly drop in North American vehicle pricing in five years was ominous.
"It sort of foreshadows what we will see in 2014," he said. "North America is going through a churn, and international operations are not going to be strong enough to offset that."
Ford said last month that vehicle pricing in the U.S. market would be "slightly unfavorable" in 2014. That combined with the cost of introducing new vehicles and a deteriorating Venezuelan economy would dent its profit this year, the company said.
The news at the time sent Ford's shares to their biggest one-day percentage drop in more than two years.
However, the stock regained ground after Mulally quashed speculation earlier this month that he would leave Ford for the top job at Microsoft Corp
On Tuesday, shares of Ford were unchanged at $15.71 in morning trading.
Ford's net income in the fourth quarter rose to $3 billion, or 74 cents a share, from almost $1.6 billion, or 40 cents a share, a year earlier.
The results included a $2.1 billion gain from the addition of deferred tax assets to the balance sheet, as well as charges of $311 million for last year's pension buyouts and layoffs in Europe.
Excluding one-time items, Ford earned 31 cents a share, 3 cents more than analysts polled by Thomson Reuters I/B/E/S had expected. Analysts also attributed some of the outperformance to a lower-than-expected tax rate.
Revenue rose 4 percent to $37.6 billion, above analysts' estimates of $35.17 billion.
In North America, Ford's pretax earnings were $1.7 billion, a decline of $200 million, as vehicle pricing fell for the first time in five years due to increased competition. However, the profit was higher than expectations of $1.5 billion by RBC Capital Markets and $1.43 billion by Barclays.
Citi analyst Itay Michaeli said the pricing declines for the industry tended to hit small and mid-size cars and small crossover vehicles. However, pricing remains strong for larger SUVs and pickup trucks for now, he added.
Ford reported a wider-than-expected loss of $126 million for South America, compared with a year-earlier profit. Its $571 million loss in Europe, though smaller than the previous year, was still wider than analysts had expected. Earnings in Asia Pacific Africa surged more than 170 percent to $106 million.
Ford's 2013 pretax profit of $8.57 billion was the second-highest in the last decade, trailing only 2011's $8.76 billion.
On Tuesday, Ford said it still expected a global pretax profit this year of between $7 billion and $8 billion, with lower auto operating margins.
The company has said 2014 will be the busiest launch year in its 111-year history, with plans to introduce 23 new vehicles globally, including 16 in North America.
Ford's most-watched new vehicle will be the redesigned F-150 full-size pickup truck in the fall. The F-150 is the best-selling pickup in North America and is a big profit center for the company.
F-150 production will be down this year for 11 weeks at Ford's truck plant in Dearborn and two weeks at a Kansas City, Missouri, factory to prepare for the new version, the company said.
Three of those shutdown weeks in Dearborn will occur in the first quarter, Ford Chief Financial Officer Bob Shanks told reporters.
Guggenheim's Stover said Ford was more likely taking the down time in the first quarter to reduce inventory of the truck and not for the changeover to the new model.
Ford has reduced the weight of the new truck by using more aluminum than in the current models.
The company said its global pension plans were underfunded by $9 billion at the end of 2013, an improvement of $10 billion from the end of 2012 and $1 billion better than it had previously forecast.
Of the $9 billion pension shortfall, $6 billion was for plans the company does not have to contribute to in advance. Shanks said that meant Ford would have more cash to invest because it only had to fund $3 billion upfront.
Ford also said that because of its 2013 earnings, it would make record profit-sharing payments of about $8,800 per person to about 47,000 U.S. hourly employees.
(Reporting by Ben Klayman and Bernie Woodall; Editing by Lisa Von Ahn)