Ford Stock Slides After Cautioning On Supply Chain Hit To Q3 Earnings

Ford said inflation-related supply costs will be around $1 million higher than prior forecasts, adding that part delays will keep as many as 45,000 vehicles in inventory.

Ford Motor  (F) – Get Ford Motor Company Report shares slumped lower Tuesday after the carmaker cautioned that gummed-up supply chains would clip its third quarter bottom line.

Ford reiterated its full-year its full-year profit forecast, which includes operating earnings of between $11.5 billion and $12.5 billion, even amid what it called “limits on availability of certain parts as well as higher payments made to suppliers to account for the effects of inflation.”

Those limits are likely to boost inflation-related supplier costs by around $1 billion, Ford said, adding that as many as 45,000 vehicles that were missing certain components, thus ultimately delaying their sale until the final three months of the year, will remain in the carmaker’s inventory.

That will mean a hit to both third quarter revenues, as well as its adjusted earnings, which it sees in the region of $1.4 billion to $1.7 billion. Ford will publish its third quarter earnings on October 26.

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Ford shares were marked 5.1% lower in pre-market trading to indicate an opening bell price of $14.17 each, a move that would extend the stock’s six-month decline to around 14%.

Late last month, Ford unveiled plans to eliminate up to 3,000 jobs, with the bulk of the reductions coming from salaried employees in the U.S. and Canada, as it cautioned that surging input costs and currency headwinds would pressure near-term margins.

Ford reported stronger-than-expected second quarter earnings in July, while confirming its full-year profit guidance, and repeated its concerns over surging costs.

Ford said its adjusted earnings for the June quarter rose more than five-fold from last year to 68 cents per share, well ahead of Street forecasts, as price increases offset input cost pressures and currency headwinds. Group revenues, Ford said, surged 66.5% to $40.22 billion, with first half free-cash flow estimated at around $3 billion.

The group also lifted its quarterly dividend to 15 cents per share, taking the payout level back to pre-pandemic levels.

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