(Corrects paragraph 4 to say Ford last paid a 10-cent dividend
in June 2006, not May, and restored dividends in March 2012, not
Jan 10 Ford Motor Co doubled its quarterly
dividend to 10 cents per share, its highest in seven years, on
the back of strong sales in North America and a healthy balance
The first-quarter payout, which will cost No. 2 U.S.
automaker about $370 million, comes despite recent market share
losses and weakness in its European business.
"Ford's plan is to grow its dividend, consistent with
earnings and liquidity growth, to a level that is sustainable
through all business cycles," the company said in a statement.
Ford last paid a 10-cent dividend in June 2006. Shortly
after that, the company reduced and later suspended its dividend
as it struggled to avoid bankruptcy. It restored dividends in
"We had thought that a dividend increase was likely but this
announcement is larger than we expected," RBC Capital Markets
analyst Joseph Spak said.
"Today's announcement shows strong confidence in their
outlook, balance sheet and liquidity."
Ford shares jumped 3 percent in premarket trade to $13.88.
The company said it increased its liquidity position by $2
billion through the first three quarters of 2012.
Earlier this month, Ford said its U.S. sales crossed 2
million cars in 2012 and reported its strongest December sales
since 2006. It beat Wall Street profit forecast when it last
reported results in October.
The automaker, however, has acknowledged losing market share
as it struggles to keep up with consumer demand. Losses from
Europe are expected to be at least $3 billion over the next two
years, and the company has announced plant closures and job cuts
to save costs.
Ford's market share fell to 15.5 percent in 2012 from 16.8
percent in 2011.
The dividend is payable on March 1 to shareholders of record
on Jan. 30.
(Reporting by A. Ananthalakshmi in Bangalore; Editing by
Sreejiraj Eluvangal and Saumyadeb Chakrabarty)