DEARBORN – Ford Motor Company issued a warning to investors on Monday, stating that it anticipates third-quarter expenses to increase by $1 billion as a result of supply chain problems and inflation.
About 40,000 to 45,000 cars, mostly high-margin trucks and SUVs that haven’t been able to reach dealers, are affected by component shortages, according to Ford.
The business continues to forecast 2022 adjusted profits before interest and taxes of between $11.5 billion and $12.5 billion and expects to finish and distribute the vehicles to dealers in the fourth quarter.
Following the report, the company’s shares dropped by nearly 5% in extended trade.
Ford noted recent discussions that caused supplier costs due to inflation to be nearly $1 billion more than anticipated.
Adjusted earnings before interest and taxes for the third quarter are expected to be in the region of $1.4 billion and $1.7 billion, according to the carmaker.
When Ford releases its third-quarter results on October 26, executives will “give additional dimension regarding expectations for full-year performance,” according to Ford.
Since the coronavirus pandemic halted production in early 2020, automakers have been dealing with supply chain issues. Despite continuous problems with part availability, particularly for semiconductor chips, demand remained high.
Similar problems were reported earlier this year by General Motors, Ford’s biggest crosstown rival. On July 1, GM issued a warning to investors that problems with its supply chain would hurt its second-quarter results, saying that it had around 95,000 vehicles in stock that were constructed but were missing some parts.
GM reaffirmed its annual guidance at the time and stated that it anticipates “virtually all of these vehicles” to be finished and sold to dealers by the end of 2022.