Shares of Ford ( F ) fell after reporting Q3 earnings that hit the top line and reaffirmed the lower end of its full-year profit forecast, even as the automaker took a big hit from its investment in Argo AI.
For the quarter, Ford reported:
Ford said it will take a $2.7 billion non-cash, pretax impairment on its investment in Argo AI, which TechCrunch reported will be shuttered, with engineers and other employees being absorbed by Ford and its partner Argo AI, the Volkswagen.
“In the third quarter, Ford made a strategic decision to shift its capital spending from L4 advanced driver assistance systems developed by Argo AI to internally developed L2+/L3 technology. Earlier, Argo AI was unable to to attract new investors. Accordingly, Ford recorded a $2.7 billion non-cash, pretax impairment on its investment in Argo AI, resulting in an $827 million net loss for Q3,” Ford said in a statement.
Ford also said it sees a full-year adjusted EBIT forecast of about $11.5 billion, which is in the lower range of the $11.5 billion to $12.5 billion prior guidance. Ford said the updated figure would be 15% higher than last fiscal year.
Ford warned last month that Q3 adjusted earnings would be hit by $1 billion in higher costs. Ford said these higher costs and 40,000 vehicles awaiting parts for completion weighed on the results. Ford said it expects to complete the vehicles and sell them to dealers in the fourth quarter.
“We ask ‘What’s best for customers?’ in everything we do,” Ford President and CEO Jim Farley said in a statement. “Winning for customers drives the company’s re-establishment 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.”
This story is developing and will be updated.
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Pras Subramanian is a reporter for Yahoo Finance. You can follow him Twitter and in Instagram.
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