Published January 09, 2014
Ford (F) raised its quarterly dividend by 25%, marking the automaker’s second increase in two years.
The company said Thursday its board declared a first-quarter dividend of 12.5 cents a share for outstanding Class B and common stock. Ford paid shareholders 10 cents a share in each quarter of 2013.
The first-quarter dividend is payable on March 3 to shareholders of record on Jan. 31.
“Our capital strategy continues to be focused on financing our One Ford plan, further strengthening our balance sheet and providing attractive returns to our shareholders,” said Bob Shanks, Ford’s chief financial officer.
Shares raced 2.1% higher to $15.87 in early morning trading, recovering a portion of the stock’s decline since Ford issued a cautious outlook last month.
Ford warned that its 2014 profits will likely fall below year-ago levels, primarily due to higher costs related to an aggressive rollout of new vehicles.
The tepid outlook confirmed some investors’ concerns that automakers like Ford will see their margins under pressure amid heightened competition. Auto sales were on a tear in 2013, continuing to fuel a comeback for Ford and its Big Three rivals, General Motors (GM) and Chrysler Group.
Dearborn, Mich.-based Ford brought back its quarterly dividend in the first quarter of 2012, starting at five cents a share. The company then doubled the payout to 10 cents for 2013.
The latest dividend hike will increase payouts to the Ford family, which exclusively owns about 70 million Class B shares and holds 40% voting power.
Also on Thursday, Ford said it lifted its liquidity position by $3 billion through the first three quarters of 2013. The auto manufacturer is scheduled to report fourth-quarter earnings on Jan. 27.
Earlier this week, CEO Alan Mulally said he plans to remain with Ford at least through the end of this year, consistent with the company’s previously announced plans. Mulally was rumored to be in the running for Microsoft’s (MSFT) top position.