Ford (F) shares fell after reporting Q3 earnings that beat on the top line and re-affirming the bottom end of its full-year profit forecast, though the automaker took a big impairment from its Argo AI investment.
For the quarter, Ford reported:
Ford said it would be taking a $2.7 billion non-cash, pretax impairment on its investment in Argo AI, which TechCrunch reported would be shutting down, with engineers and other employees being absorbed by Ford and its Argo AI partner, Volkswagen.
“In the third quarter, Ford made a strategic decision to shift its capital spending from the L4 advanced driver assistance systems being developed by Argo AI to internally developed L2+/L3 technology. Earlier, Argo AI had been unable to attract new investors. Accordingly, Ford recorded a $2.7 billion non-cash, pretax impairment on its investment in Argo AI, resulting in an $827 million net loss for Q3,” Ford said in a statement.
Ford also said it sees its full-year adjusted EBIT forecast to be about $11.5 billion, which would be in the lower range of its $11.5 billion to $12.5 billion prior guidance. Ford says the updated figure would still be about 15% higher than the last fiscal year.
Ford warned last month that Q3 adjusted earnings would be impacted by $1 billion in higher costs. Ford says these higher costs and 40,000 vehicles awaiting parts for completion weighed on results. Ford says it expects to complete the vehicles and sell them to dealers during the fourth quarter.
“We’re asking ‘What’s best for customers?’ in everything we do,” Ford President and CEO Jim Farley said in a statement. “Winning for customers is driving a re-founding of the company through Ford+, with high ambitions for quality, innovation, profitability and growth across all our businesses – making smart choices about how we deploy capital even as we learn and adapt.”
This story is developing and will be updated.
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Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
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Source: https://finance.yahoo.com/news/ford-earnings-170525397.html