American car maker Ford Motor recorded a net loss of 827mn in Q3 2022 compared to a net profit of $1.8bn one year prior despite revenue increasing 10% to $39.2bn. The loss was mainly driven by its strategic decision to shift capital spending away from its Argo AI self-driving business. Ford had incurred a $2.7bn pre-tax impairment on its investment in Argo AI, ultimately weighing down net income and leading to its Q3 loss. Besides this, it had posted adjusted earnings of $1.8bn in Q3, down 40% from last year, but higher than its expectation of $1.4-$1.7bn. The decline from last year is primarily due to supply shortages and higher-than-expected supplier payments. On the balance sheet, Ford ended the quarter with strong cash and liquidity of $32bn and $49bn respectively, while its total debt stood at $128bn, down 7% from year end 2021. CEO Jim Farley said, “Ford will shift its development focus away from fully self-driving systems developed by Argo to advanced driver assistance systems (ADAS) created internally at Ford…Profitable, fully autonomous vehicles at scale are a long way off and we won’t necessarily have to create that technology ourselves”.
Ford’s 3.25% 2032s gained 1.21 points and are currently trading at 74 cents on the dollar to yield 7.12%.
