Ford Motor (F) Q3 2022 earnings | Daily News Byte

DETROIT – Ford Motor posted a net loss of $827 million in the third quarter, weighed down by supply chain problems and costs related to winding down its autonomous vehicle unit Argo AI.

Still, the automaker managed to narrowly beat Wall Street’s weak expectations for the season and guided to the lower end of its previous earnings forecast for the year.

The company’s shares fell nearly 1.5% in extended trading following the report.

Here’s how Ford performed in the third quarter, compared to analysts’ estimates compiled by Refinitiv:

• Adjusted earnings per share: 30 cents compared to the 27 cents estimated
• Car income: Estimated $37.2 billion compared to $36.25 billion

Auto industry earnings and forecasts are closely watched by investors for any signs that consumer demand may weaken amid rising interest rates and looming recession fears. However, both Ford and crosstown rival General Motors continue to say that demand for their products remains strong despite outside economic concerns and rising interest rates.

Ford reported adjusted earnings of $1.8 billion for the quarter, down 40% from a year earlier but slightly above its own announced expectations, set last month.

Ford in September partially previewed its results, including expected adjusted earnings before interest and taxes in the range of $1.4 billion to $1.7 billion – some analysts had expected quarterly profit closer to at $3 billion – but adopted full-year guidance of adjusted earnings before interest and taxes of between $11.5 billion to $12.5 billion.

On Wednesday, Ford updated its guidance to forecast full-year adjusted earnings before interest and taxes of about $11.5 billion. It raised its full-year adjusted free cash flow forecast, however, to between $9.5 billion and $10 billion – from $5.5 billion to $6.5 billion – on strength in the company’s auto operations.

Ford recorded a $2.7 billion non-cash, pretax charge on its investment in Argo AI, which the company first invested in starting in 2017. It later split its ownership of Argo AI with German automaker Volkswagen in 2019.

Ford CFO John Lawler said the company is scaling back operations to focus on advanced driver-assist systems like the BlueCruise hands-free highway driving system and other operations not considered “fully autonomous.”

“It has become very clear that profitable, fully autonomous vehicles at scale are still a long way off,” he told reporters. “We also decided that we didn’t have to create that technology ourselves.”

Some of the roughly 2,000 employees for Argo AI are expected to be offered positions at Ford or Volkswagen, officials said. Volkswagen said in a statement that it will no longer invest in Argo AI.

In a pre-release of some results last month, Ford attributed the lower-than-expected revenue to parts shortages affecting 40,000 to 50,000 vehicles as well as an extra $1 billion in unexpected supplier costs in the quarter .

Lawler said Wednesday that the company still expects to finish those vehicles and have them shipped to dealers by the end of the year.

Cars, mostly high-margin pickups and SUVs, dragged down Ford’s North American profits. The company’s adjusted profit margin for the region was just 5%, down from 10.1% last year.

Ford’s North American operations posted adjusted earnings of $1.3 billion in the third quarter, down 46% from a year earlier. The automaker recorded gains in Europe and South America, while its China operations lost $193 million.

Ford’s total revenue for the quarter, which includes its financial arm, was $39.4 billion, a 10% increase from last year. Through the third quarter, the company’s year-to-date revenue was $114.1 billion, a 16% increase compared to the same time period in 2022.

Ford’s earnings came a day after its crosstown rival General Motors significantly beat Wall Street revenue expectations but slightly missed revenue. GM’s adjusted profit margin for the quarter narrowed to 10.2% compared to 10.7% in the third quarter of 2021, including 10% in North America.

– CNBC’s John Rosevear contributed to this report.