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2023 Ford F-150 Raptor R
Ford
DETROIT – Ford Motor on Monday warned investors that the company expects to incur an extra $1 billion in costs in the third quarter due to inflation and supply chain issues.
Ford said supply problems have resulted in parts shortages affecting about 40,000 to 45,000 vehicles, mainly high-margin trucks and SUVs that have yet to reach dealers.
The company expects to complete and deliver the vehicles to dealers in the fourth quarter and still expects 2022 adjusted earnings before interest and taxes to be between $11.5 billion and $12.5 billion.
The company’s shares fell about 5% in extended trading following the update.
Ford cited recent negotiations resulting in inflation-related supplier costs that will run about $1 billion higher than originally expected.
The automaker expects third-quarter adjusted earnings before interest and taxes to be in the range of $1.4 billion to $1.7 billion.
Ford added that executives “will provide more dimension regarding expectations for full-year performance” when it reports its third-quarter results on Oct. 26.
Automakers have been battling supply chain problems since the coronavirus pandemic halted manufacturing in early 2020. Demand has continued to strengthen despite ongoing issues with the availability of parts, particularly semiconductors chips.
Ford’s biggest crosstown rival, General Motors, announced similar issues earlier this year. GM on July 1 warned investors that supply chain issues would cut into its earnings in the second quarter, noting that it has about 95,000 vehicles in its inventory that have been produced but are missing some parts.
GM at the time reaffirmed its annual guidance and said it expected “substantially all of these vehicles” to be completed and sold to dealers before the end of 2022.
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