Ford Motor Co. saw a pre-tax accumulative loss of $212 million for its “all other” category — which includes Ford Smart Mobility LLC — in the first quarter, according to the company’s earnings call yesterday.
The loss is a net interest expense on the OEM’s automotive debt related to investments in emerging opportunities, Robert Shanks, Ford’s executive vice president and chief financial officer, said on the call. “There was a very small loss at our FSM, Ford Smart Mobility LLC,” he added.
The losses are related to investments and costs in electrification, autonomy, mobility, connectivity, data, and analytics, Shanks said. However, the company still plans to invest “aggressively, but prudently in emerging opportunities,” he said.
Ford Smart Mobility — which was launched in March 2016 — is responsible for designing, building, growing, and investing in new mobility services. And Ford’s mobility services have the opportunity to drive 20% of overall margins, Fields said on the company’s 4Q16 earnings call.
Ford made several investments in mobility this year. In February, for example, the automaker announced its plans to invest $1 billion over the next five years in artificial intelligence company Argo AI. Additionally, there were reports in March stating that Ford invested in stealth autonomous software company Autonomic.
“Ford Credit continues to be disciplined, while at the same time being a very healthy contributor to our bottom line,” said Mark Fields, Ford’s president and chief executive, also on the call.
Additionally, the company has goals to develop and launch 13 new electric vehicles globally over the next five years, according to the earnings report.
Ford is transforming “the underperforming parts” of its business to grow in the emerging areas, Fields said. As far as mobility — including data, autonomous vehicles, and connectivity — “I think we need to do a better job as a company in dimensioning what that means for us in the future in terms of revenue and profit growth,” Fields said. “We have talked about the investments and we will do that going forward.”
Additionally, Ford Credit continues to be “disciplined, while at the same time being a very healthy contributor to our bottom line,” Fields said. Net receivables were at $133 billion in 1Q, up 6% from the same time a year prior.
This article was written by Natalie Mattila and Emma Sandler.
To learn more about the evolution of transportation, join us at the second annual Auto Finance Innovation 2017 conference, May 17-18 at the Hilton Bayfront in San Diego. Visit www.autofinanceinnovation.com to register or learn more.
