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Shares of Ford Motor (NYSE:F) are down 2% after the carmaker reported mixed Q3 results. Ford reported a Q3 EPS of $0.30 on revenue of $39.4 billion. This compares to the consensus of EPS of $0.32 on sales of $37.75 billion.
Moreover, Ford announced it is shutting down its Argo AI robotaxi business and taking a non-cash charge of $2.7 billion, including an $827 million loss for Q3. Ford also plans to hire “talented” engineers from Argo AI.
“In the third quarter, Ford made a strategic decision to shift its capital spending from the L4 advanced driver assistance systems being developed by Argo AI to internally developed L2+/L3 technology. Earlier, Argo AI had been unable to attract new investors,” the company stated.
Ford also raised its full-year guidance to now expect adjusted EBIT at around $11.5 billion and FCF to a range of $9.5 billion to $10 billion. Both were higher than what analysts surveyed by Bloomberg were expecting.
Morgan Stanley analysts weighed in positively on Ford’s decision to shut down Argo.
“We see Ford’s decision to wind down its Argo robotaxi business as a positive that investors will appreciate over time. Heading into a downturn, we’d expect to see more legacy auto companies focus on proven cash generators (ICE) while more cautiously/slowly architecting the on-shore EV strategy,” they said.
Bank of America analysts were surprised by Ford’s decision to close down the Argo project. Still, they reiterated a Buy rating and a $28 per share price target on F stock.
“Ford is aggressively repositioning its business model by leveraging the combined strength of its Ford Blue and Ford Pro businesses to fund its fast growing Model e business along with vital connected technology. Because of this and solid near-term execution, we reiterate our Buy rating.”
