Ford warns investors of an additional $1 billion in supply chain costs in the third quarter


2023 Ford F-150 Raptor R


DETROIT — Ford Motor warned investors Monday that the company expects to incur an additional $1 billion in costs in the third quarter due to inflation and supply chain problems.

Ford said delivery problems have led to a parts shortage of about 40,000 to 45,000 vehicles, mainly high-margin trucks and SUVs that have been unable to reach dealers.

The company expects to complete and deliver the vehicles to dealers in the fourth quarter and still forecast 2022 adjusted earnings before interest and taxes of between $11.5 billion and $12.5 billion.

The company’s shares fell about 5% in extended trading after the update.

Ford cited recent negotiations that have resulted in inflation-related supplier costs that will be about $1 billion higher than originally expected.

The automaker expects adjusted earnings for the third quarter before interest and taxes to be between $1.4 billion and $1.7 billion.

Ford added that executives will “add more dimension to expectations for full-year performance” when it reports its third-quarter results on Oct. 26.

Automakers have struggled with supply chain issues since the coronavirus pandemic brought production to a halt in early 2020. Demand remained strong despite ongoing issues with parts availability, especially semiconductor chips.

Ford’s biggest rival in the city, General Motors, announced similar problems earlier this year. GM warned investors on July 1 that supply chain problems would dent second-quarter profits, noting that it had about 95,000 vehicles in its inventory that were manufactured but were missing a number of components.

GM also reconfirmed its annual outlook at the time, saying it expects “virtually all of these vehicles” to be completed and sold to dealers before the end of 2022.

Source link


Please enter your comment!
Please enter your name here