Ford reveals third-quarter net loss, weighed down by supply chain problems and Argo AI investment

DETROIT – Ford Motor recorded a net loss of $827 million during the third quarter, weighed down by supply chain problems and an investment in autonomous vehicle unit Argo AI.

Still, the automaker narrowly beat Wall Street’s subdued expectations for the period and guided to the lowest end of its previously forecasted earnings for the year.

Shares of the company were down roughly 1.5% in extended trading following the report.

The auto industry’s earnings and forecasts are being closely watched by investors for any signs that consumer demand could be weakening amid rising interest rates and looming recession fears. On Tuesday, General Motors said demand for its products remains strong despite outside economic concerns and rising interest rates.

Here’s how Ford performed during the third quarter, compared with analysts estimates as compiled by Refinitiv:

• Adjusted earnings per share: 30 cents vs. 27 cents estimated
• Automotive revenue: $37.2 billion vs. $36.25 billion estimated

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

Ford in September partially pre-released its results, including projected adjusted earnings before interest and taxes in the range of $1.4 billion to $1.7 billion — some analysts had been expecting a quarterly profit closer to $3 billion — and full-year guidance of 2022 adjusted earnings before interest and taxes of between $11.5 billion to $12.5 billion.

The company at the time attributed the results to parts shortages affecting 40,000 to 50,000 vehicles as well as an extra $1 billion in unexpected supplier costs during the quarter.

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 – up from $5.5 billion to $6.5 billion – on strength in the company’s automotive operations.

Ford CFO John Lawler said the company is winding down the operations to focus on advanced driver-assist systems such as its BlueCruise hands-free highway driving system and other operations that aren’t considered “fully autonomous.”

“It’s become very clear that profitable, fully autonomous vehicles at scale are still a long way off,” he told reporters. “We’ve also concluded that we don’t necessarily 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.

This story is developing. Please check back for updates.

– CNBC’s John Rosevear contributed to this report.