Shares of Ford Motor Co. fell more than 4% in the extended session on Monday after the company said inflation and parts shortages will leave it with more incomplete cars than it expected, reminding that Wall Street’s supply chain hurdles are far from over for automakers.
It said it expects to have between 40,000 and 45,000 vehicles in stock at the end of the third quarter “which lack some parts that are currently in short supply.”
The automaker also said that based on its recent negotiations, payments to suppliers will be about $1 billion higher than expected for the quarter, thanks to inflation. However, the company reaffirmed its forecast for the year.
CFRA analyst Garrett Nelson told MarketWatch that Ford’s warning “is evidence that auto parts shortages and supply chain issues persist.”
Many investors began to believe that “these problems were in the rearview mirror as stocks started to recover from record lows in the last year or so,” Nelson said.
The unfinished vehicles include high-demand, high-margin models of popular trucks and SUVs, Ford said. This will move some shipments and revenue into the fourth quarter.
“Ironically, Ford may have become a victim of its own success that its recent US sales growth has outpaced its peers by a large margin,” Nelson said. Its production in the third quarter “wasn’t apparently able to keep up with demand.”
Ford reiterated its forecast for full-year 2022 adjusted earnings before interest and taxes of between $11.5 billion and $12.5 billion, despite the shortfalls and higher payments to suppliers, it said.
Ford called for a third-quarter EBIT adjustment of between $1.4 billion and $1.7 billion.
Ford shares ended the regular trading day 1.4% higher. The company embarked on a reorganization to focus on electric vehicles, and Last month confirmed layoffs Regarding its new structure.
Ford is due to report third-quarter financial results on October 26, when it said it expects to “provide more dimensions around the outlook for full-year performance.”
Analysts polled by FactSet expect the automaker to report adjusted earnings of 51 cents per share, which is in line with adjusted earnings per share for the third quarter of 2021, on revenue of $38.8 billion.
Quarterly sales will compare with $35.7 billion in revenue in the same period last year.
Ford shares are down 4.4% after hours, losing 28% so far this year, compared to losses of 18% for the S&P 500 SPX,
This news comes a week after FedEx Corp. FDX,
Markets stumbled and raised fears of an economic slowdown By retracting its forecast for the year and warning The year was likely to get worse for business.
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