2023 Ford F-150 Raptor R
DETROIT – Ford Motor on Monday warned investors that the company expects to incur $1 billion more in costs than previously expected during the third quarter due to inflation and supply chain issues.
Ford said supply problems have resulted in parts shortages affecting roughly 40,000 to 45,000 vehicles, largely high-margin trucks and SUVs, that haven’t been able to reach dealers.
The company expects to complete and deliver the vehicles to dealers in the fourth quarter and is still projecting 2022 adjusted earnings before interest and taxes of between $11.5 billion to $12.5 billion.
Shares of the company fell about 5% in extended trading following the update.
Ford said based on recent negotiations, inflation-related supplier costs during the third quarter will run about $1 billion higher than originally expected.
The automaker anticipates third-quarter adjusted earnings before interest and taxes to be in the range of $1.4 billion to $1.7 billion.
The company said executives will “provide more dimension about expectations for full-year performance” when the automaker reports its third-quarter results on Oct. 26.
Automakers have been battling supply chain problems since the coronavirus pandemic brought manufacturing to a standstill in early 2020. Demand continued to be strong, followed by ongoing issues with the availability of parts, specifically, semiconductor chips.
Ford’s largest crosstown rival, General Motors, announced similar issues earlier this year. GM on July 1 warned investors that supply chain issues would impact its second-quarter earnings, as it had about 95,000 vehicles in its inventory that were manufactured without certain components.
GM at the time also reconfirmed its yearly guidance and said it expects that “substantially all of these vehicles” will be completed and sold to dealers before the end of 2022.
(Except for the headline, this story has not been edited by PostX News staff and is published from a syndicated feed.)