Ford’s 1994 Profit More Than Doubles : Autos: $5.3-billion net sets a record. It’s tempered by sluggish January sales and latest Fed hike.

DEARBORN, Mich. — Ford Motor Co. made it a hat trick Wednesday as the company joined its Big Three rivals in reporting record profits for 1994, making it the auto industry’s most lucrative year ever.

But Ford’s net income of $5.3 billion for 1994 was partially overshadowed by industry reports of weak auto sales in January and another hike in short-term interest rates by the Federal Reserve Board.

The 1994 profit for the nation’s No. 2 auto maker was more than double its earnings in 1993. Spurred by strong U.S. sales and a recovery in Europe, Ford surpassed by just $8 million its previous earnings record, set in 1988.

Together Ford, General Motors Corp. and Chrysler Corp. earned $13.9 billion last year, compared with $2.4 billion in 1993 and easily eclipsing the previous record of $11.2 billion set six years ago.

The profits came on the strength of a 9% increase in sales, but questions are already being raised about the continuing strength of the market. Industry sales were down about 3% in January from a year ago, according to reports released Wednesday by about two-thirds of the auto makers in the United States.

Still, auto officials and many analysts insist the boom is not over. “There is still plenty of steam left in this cycle,” said David McCammon, Ford’s vice president of finance.

Ford will not report its monthly sales until Friday, but McCammon said they would be higher than last January. Meanwhile, GM, Chrysler, Honda, Mazda and Mitsubishi all reported decreases in sales, while Toyota’s were up.

Chrysler’s sales were down 6% in January, and GM’s 5.5%. But a GM spokesman said sales are still expected to rise modestly in 1995 and the dip was “due more to product availability than market trends.”

Concern about sales has increased because small car sales have slowed, cash rebates to buyers are increasing and inventories of some popular cars are bloated, prompting some temporary plant shutdowns.

But analysts said the negatives are still overshadowed by a strong national economy. Inflation remains in check, job and income growth are strong and consumer confidence is high, they said.

“The sky is not falling on car sales,” said Nicholas Loboccaro, analyst for S.G. Warburg in New York.

Even worries that interest rates will crimp sales are overblown, said McCammon before the Fed on Wednesday increased the federal funds rate for the seventh time in a year--this time by another half a percentage point. He said that each 1% increase in interest rates adds only about $7 a month to the average car loan.

Still, the rate increases could adversely impact consumer confidence, McCammon conceded. And dealers are cutting back orders because the rates on big loans needed to stock their showrooms have gone up 2.5% in the past year.

Despite the anxiety about the market’s direction, Ford and the other domestic auto makers are basking in the glow of a banner year.

Ford, which has five of the 10 best-selling models, said 1994 profits amounted to $4.97 a share. The year before, it earned $2.5 billion, or $2.27 a share. Sales totaled $128.4 billion in 1994, up from $108.5 billion in 1993.

In the fourth quarter, Ford earned $1.6 billion, or $1.47 a share, compared with $719 million, or 65 cents a share a year earlier.

Despite the strong showing, Ford stock eased 12.5 cents a share to $25.125 in trading on the New York Stock Exchange.