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

2023 Ford F-150 Raptor R

Ford

DETROIT – Ford Motor on Monday warned investors that the firm expects to incur $1 billion extra in costs than beforehand anticipated during the third quarter as a result of inflation and supply chain points.

Ford mentioned supply issues have resulted in elements shortages affecting roughly 40,000 to 45,000 automobiles, largely high-margin vans and SUVs, that have not been capable of attain sellers.

The firm expects to finish and ship the automobiles to sellers in the fourth quarter and remains to be projecting 2022 adjusted earnings earlier than curiosity and taxes of between $11.5 billion to $12.5 billion.

Shares of the firm fell about 5% in prolonged buying and selling following the replace.

Ford mentioned based mostly on current negotiations, inflation-related provider costs during the third quarter will run about $1 billion increased than initially anticipated.

The automaker anticipates third-quarter adjusted earnings earlier than curiosity and taxes to be in the vary of $1.4 billion to $1.7 billion.

The firm mentioned executives will “provide more dimension about expectations for full-year performance” when the automaker experiences its third-quarter outcomes on Oct. 26.

Automakers have been battling supply chain issues since the coronavirus pandemic introduced manufacturing to a standstill in early 2020. Demand continued to be sturdy, adopted by ongoing points with the availability of elements, particularly, semiconductor chips.

Ford’s largest crosstown rival, General Motors, introduced comparable points earlier this 12 months. GM on July 1 warned investors that supply chain points would affect its second-quarter earnings, because it had about 95,000 automobiles in its stock that had been manufactured with out sure parts.

GM at the time additionally reconfirmed its yearly steerage and mentioned it expects that “substantially all of these vehicles” might be accomplished and bought to sellers earlier than the finish of 2022.

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