Ford warns investors of $1B extra in supply chain costs during Q3

2023 Ford F-150 Raptor R

Ford

Detroit – Ford Motor He warned investors on Monday that the company expects $1 billion in additional costs in the third quarter due to inflation and supply chain issues.

Ford said parts shortages caused about 40,000 to 45,000 vehicles, primarily high-margin trucks and SUVs, not reaching dealers due to supply issues.

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

Shares of the company fell about 5% in extended trading following the update.

Ford cited recent negotiations that resulted in inflation-related supplier costs that would be $1 billion higher than originally anticipated.

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

Ford added that when it reports its third-quarter results on Oct. 26, executives will “provide an additional dimension regarding expectations for full-year performance.”

Automakers have faced supply chain problems since the coronavirus pandemic halted production in early 2020. Despite problems with the availability of components, particularly semiconductor chips, demand continued to be strong.

Ford’s biggest crosstown rival, General Motors, reported similar issues earlier this year. On July 1, G.M warned investors It noted that supply chain issues would hurt its second-quarter earnings, with about 95,000 vehicles in its inventory made but missing some components.

GM reaffirmed its annual guidance at the time and said it expects “substantially all of these vehicles” to be completed and sold to dealers by the end of 2022.

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