DETROIT — Ford on Thursday reported second-quarter income of $1.1 billion despite a pandemic that idled its North American plants for roughly half the reporting period.
The surprise profit came largely from a $3.5 billion gain on its investment in Argo AI, the company that is developing a self-driving vehicle system. Volkswagen Group closed on an deal with Ford for a stake in Argo last month and CFO Tim Stone said the self-driving startup is now valued at $7.5 billion.
The automaker lost $1.9 billion before interest and taxes and one-time items in the quarter as revenue fell 50 percent to $19.4 billion. Still, the operating loss was much less than the $5 billion Ford had forecast earlier in the year.
“Overall it was a good quarter for Ford in light of the circumstances,” Stone said on a call with media.
Shares in Ford rose 1.9 percent to $6.74 in after-hours trading.
In addition to the gain from Argo, Stone said Ford benefited from a smoother-than-expected return to work after it restarted assembly plants in May.
In North America, where Ford usually generates the bulk of profits, the company reported a $974 million loss before interest and taxes. Stone said robust pickup sales helped Ford from sinking further in the quarter, and that it was “in good shape” with a 75 day supply of inventory, compared to 79 days last year.
Ford lost money in every region it operates in, including a $664 million loss in Europe and a $136 million loss in China.
Ford in a release said it had more than $39 billion in cash at the end of the quarter, reiterating it has sufficient funds to get through the end of the year with no additional financing actions. The automaker said that on July 27 it repaid half of the outstanding $15.4 billion on its revolving credit facilities and extended $4.8 billion of its three-year revolving credit lines.
Stone said Ford expects to have $20 billion in cash through the second half of this year, even if demand falls or factories are forced to close again because of a surge in virus cases.
"Our global team is delivering great value for customers, performing strongly and advancing the business against extraordinary headwinds," CFO Tim Stone said in a statement. "You're seeing us fix things that held us back in the past, accelerate in areas like commercial vehicles and SUVs, and set ourselves up for growth in connectivity, electrification and autonomous vehicles."
Stone said Ford expects to post a profit again in the third quarter, but expects a loss in the fourth quarter due to the launch of new products such as the Mustang Mach-E and Bronco Sport.
Ford said it expects an adjusted-EBIT loss for the full year.