Ford stock is suffering its worst day since 2011 after a cost warning | Daily News Byte

DETROIT – Ford Motor’s The stock suffered its worst day in more than 11 years, after the automaker pre-released part of its third-quarter earnings report and warned investors of $1 billion in unexpected supplier costs.

Ford shares closed Tuesday at $13.09 apiece, down 12.3%. The Detroit automaker has lost about $7 billion from its market value.

It was also the stock’s worst day on a percentage basis since Jan. 28, 2011, when the automaker’s fourth-quarter earnings disappointed investors and the stock shed 13.4% to close at $16.27 a share, according to in data compiled by FactSet.

Ford, after markets closed Monday, said supply problems had resulted in parts shortages affecting about 40,000 to 45,000 vehicles, mainly high-margin trucks and SUVs that hasn’t reached dealers yet.

Despite the problems and additional costs, Ford affirmed its guidance for the year but set expectations for third-quarter adjusted earnings before interest and taxes to be in the range of $1.4 billion to $1.7 billion. That would be below the forecasts of some analysts, who had projected quarterly revenue closer to $3 billion.

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

While no major Wall Street analysts downgraded the stock because of the update, many caught Ford’s announcement. Expectations are that supply chain problems will ease. Furthermore, Ford has recently avoided such problems better than some of its competitors.

Goldman Sachs analyst Mark Delaney said his company was “surprised by the 3Q pre-announcement given the progress Ford has previously made on supply chain bottlenecks.”

BofA Securities analyst John Murphy echoed those sentiments in a note to investors on Tuesday: “Ultimately, this news is somewhat surprising as broader macro news suggests that supply chains are gradually -has been getting better over the past few months.”

Some analysts questioned whether this was a Ford-specific problem, or a red flag for additional problems for the automotive industry.

GM CEO Mary Barra told CNBC on Tuesday that the company’s supply chain problems have eased.

“We see an improved situation,” Barra said. “We continue to work, resolve issues, look for efficiencies as a normal course, and we will continue to do so.”

Barra said GM is on track to complete the roughly 95,000 vehicles in its inventory by the end of this year that were made without some parts because of supply chain problems. In July, GM warned investors that supply chain issues would affect its earnings in the second quarter, while maintaining its guidance for 2022.

Ford said its unfinished vehicles are expected to be completed and shipped to dealers in the fourth quarter.

In response to Tuesday’s decline, Ford spokesman TR Reid said the company continues to deliver on its Ford+ restructuring plan.

“Markets do well over time,” he said. “We have a great plan at Ford+ to create value for customers, and investors and other stakeholders over time. It’s our obligation to execute against this and create that opportunity.”

Ford stock is down more than 36% year to date but is still up about 2% over the past 12 months.

— by CNBC Christopher Hayes and Michael Bloom contributed to this report.