Ford Stock Lower After Q3 Earnings Beat, Narrowed 2022 Profit Guidance; Plans Argo AI Wind-Down

“Winning for customers is driving a re-founding of the company through Ford+, with high ambitions for quality, innovation, profitability and growth,” said CEO Jim Farley.

Ford Motor Co  (F) – Get Ford Motor Company Report reported better-than-expected third quarter earnings Wednesday, while narrowing its full-year profit guidance, and said it would wind-down its autonomous vehicle joint venture with Germany’s Volkswagen.

Ford said its adjusted earnings for the September quarter fell 41.2% from last year to 30 cents per share but came in just ahead of Street forecasts of 27 cents per share, as price increases offset input cost pressures and currency headwinds. Group revenues, Ford said, 10.4% to $39.4 billion, firmly topping analysts’ estimates of a $36.25 billion tally.

Ford also clipped its guidance for full-year profits, which it sees at around $11.5 billion, down from a prior estimate of between $11.5 billion to $12.5 billion. Free cash flow, however, is likely to rise to between $9.5 billion and $10 billion.

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“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,” said CEO Jim Farley.  

Ford shares were marked 2% lower in after-hours trading immediately following the earnings release to indicate a Thursday opening bell price of $12.57 each.

Ford also booked a $2.7 billion non-cash charged linked to its investment in Argo AI, a joint project with Volkswagen, as it transitions to what it called “internally developed technology”. 

Earlier this month, Ford raised prices for the 2023 model its signature EV, the F-150 Lightning Pro, by around 11%, to just under $52,000, citing “ongoing supply chain constraints, rising material costs” and a host of other factors. 

Supply shortages, in fact, held down Ford’s overall September sales total, although the automaker shifted 464,674 vehicles over the whole of the third quarter, a 16% improvement from the same period last year.

Earlier this week , Ford’s larger rival, General Motors GM, Street-beating third quarter earnings of $2.25 per share, on record revenues of $41.9 billion, thanks in part to higher car prices and ongoing vehicle demand.

GM also repeated its view that adjusted 2022 earnings will come in between $6.50 and $7.50 per share, or $13 billion to $15 billion, with adjusted automotive free-cash flow from operations of between $7 billion and $9 billion.

GM sold just under 555,600 cars over the three months ending in September, a 24% from last year and a tally that reclaimed the nine-month U.S. lead over Toyota  (TOYOF)  – which bested both Ford and GM in total 2021 sales for the first time since 1931.

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