DETROIT — Ford Motor Co. on Wednesday posted a third-quarter loss of $827 million that it largely blames on newly revealed plans to shut down Argo AI, a self-driving vehicle development company the automaker had invested in heavily.
CEO Jim Farley said the company now believes mass deployment of fully self-driving vehicles is “a long way off,” while CFO John Lawler added it could be “five-plus years away.”
Ford’s adjusted earnings before interest and taxes fell 40 percent from the same period a year ago, to $1.8 billion. That’s slightly higher than the $1.4 billion to $1.7 billion range it projected last month along with a warning that inflation had significantly increased supplier costs.
The automaker’s adjusted profit margin fell by almost half, to 4.6 percent, while revenue rose 10 percent, to $39.4 billion.
Lawler told journalists that Ford’s Q3 results “could have been better” but that the automaker was encouraged by its $3.8 billion operating cash flow. It now expects full-year adjusted earnings to come in at about $11.5 billion, at the low-end of the $11.5 billion to $12.5 billion guidance it had previously given.
Lawler said that’s partly attributable to the fact that many of Ford’s non-semiconductor suppliers are unable to ramp production as quickly as it needs due to labor shortages and other factors.
Ford earned $1.3 billion during the quarter in North America and posted 5 percent EBIT margins, a decrease from this time a year ago due to higher costs and a lack of available parts. At the end of September, Ford said it had 40,000 vehicles partially-built and awaiting parts, although it hopes to work through all of those by the end of the year.
Ford made $256 million in Europe in the quarter, $147 million in South America and $104 million in its International Markets Group. The automaker lost $154 million in China.
Ford said its third-quarter results were marred by Argo AI’s inability to attract new investors — resulting in a $2.7 billion non-cash, pretax impairment on its previous investments in the company. As Argo winds down, Ford now plans to halt spending on Level 4 advanced driver-assist systems to focus on lower-level advanced systems that can be deployed sooner.
