Ford Motor Company issued a warning to investors that it expects third-quarter costs to increase by $1 billion as a result of supply chain problems and inflation.
About 40,000 to 45,000 vehicles, mostly high-margin trucks and SUVs that haven't been able to reach dealers, are affected by parts shortages, according to Ford.
The company continues to forecast 2022 adjusted earnings before interest and taxes of between $11.5 billion and $12.5 billion and expects to finish and deliver the vehicles to dealers in the fourth quarter.
Following the update, the company's shares dropped by about 5% in extended trading.
Ford cited recent negotiations that caused supplier costs related to inflation to be about $1 billion higher than anticipated.
Adjusted earnings before interest and taxes for the third quarter are expected to be in the range of $1.4 billion and $1.7 billion, according to the automaker.
When Ford releases its third-quarter results on October 26, executives will "provide more dimension about expectations for full-year performance," according to Ford.
Since the coronavirus pandemic halted production in early 2020, automakers have been dealing with supply chain issues. Despite ongoing problems with part availability, particularly for semiconductor chips, demand remained high. Similar problems were reported earlier this year by General Motors, Ford's biggest crosstown rival. On July 1, GM issued a warning to investors that problems with its supply chain would hurt its second-quarter earnings, noting that it had about 95,000 vehicles in stock that were manufactured but were missing some parts.
GM reaffirmed its annual guidance at the time and stated that it anticipates "substantially all of these vehicles" to be finished and sold to dealers by the end of 2022.
(Source:www.investors.com)
About 40,000 to 45,000 vehicles, mostly high-margin trucks and SUVs that haven't been able to reach dealers, are affected by parts shortages, according to Ford.
The company continues to forecast 2022 adjusted earnings before interest and taxes of between $11.5 billion and $12.5 billion and expects to finish and deliver the vehicles to dealers in the fourth quarter.
Following the update, the company's shares dropped by about 5% in extended trading.
Ford cited recent negotiations that caused supplier costs related to inflation to be about $1 billion higher than anticipated.
Adjusted earnings before interest and taxes for the third quarter are expected to be in the range of $1.4 billion and $1.7 billion, according to the automaker.
When Ford releases its third-quarter results on October 26, executives will "provide more dimension about expectations for full-year performance," according to Ford.
Since the coronavirus pandemic halted production in early 2020, automakers have been dealing with supply chain issues. Despite ongoing problems with part availability, particularly for semiconductor chips, demand remained high. Similar problems were reported earlier this year by General Motors, Ford's biggest crosstown rival. On July 1, GM issued a warning to investors that problems with its supply chain would hurt its second-quarter earnings, noting that it had about 95,000 vehicles in stock that were manufactured but were missing some parts.
GM reaffirmed its annual guidance at the time and stated that it anticipates "substantially all of these vehicles" to be finished and sold to dealers by the end of 2022.
(Source:www.investors.com)
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