NEW YORK (AP) -- A trio of Wall Street analysts backed their "Buy" ratings for Ford Motor Co., saying that investors shouldn't be too concerned about the automaker's lower-than-expected fourth-quarter results, noting that its profits and sales should improve this year as the industry continues to recover.
Ford shares closed down more than 4 percent on Friday, after the Dearborn, Mich.-based automaker said it posted an adjusted fourth-quarter profit of 20 cents per share, 5 cents below average analysts' predictions.
Ford officials said Thai flooding and the rising cost of steel and other commodities hurt the automaker more than analysts expected. The company also lost money in Europe and Asia, while profits fell in South America.
But analysts were optimistic about the company's prospects down the road.
Jefferies analyst Peter Nesvold said he expects automotive margins to improve this year, while cost increases should remain minimal. In addition, Ford's product lineup should get a boost from new versions of its Fusion sedan and Escape SUV.
"Coupled with a market backdrop that wants more auto exposure, we think that Ford shares will resume their upward trajectory once we get past the selling pressure from the mixed fourth-quarter print," Nesvold wrote in a Monday note to investors.
Citi Investment Research's Itay Michaeli said that the automaker is making progress toward its mid-decade financial goals, while its free cash flow and balance sheet are also improving.
"If there's such a thing as a quality miss, this may be it," Michaeli wrote in a Friday note. "Ford's incremental contribution profits were strong in the fourth quarter (all regions) with much of the margin pressure coming from commodities and exchange. Commodity costs have abated and our January checks suggest that Ford's U.S. transaction prices are up considerably."
Sterne Agee analyst Michael Ward added that Ford's full-year results back his belief that the company's results will continue to improve over the next few years.
"In our view, Ford's cost, revenue and balance sheet restructuring are complete and the company is well positioned to benefit from an improving industry environment, especially in North America," Ward wrote.
The stock traded at $12.05 in premarket trading, down 16 cents. Over the past year shares have traded between $9.05 and $18.88.
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