Shares of Ford Motor Co. (F) are down 5% after the Detroit automaker warned that its supplier
costs are $1 billion U.S. higher than had been expected due to rising inflation.
Consequently, the automotive manufacturer said it now expects earnings in the range of $1.4
billion U.S. to $1.7 billion U.S. when it reports results in October.
The new forecast is far below the $3.7 billion U.S. in earnings Ford reported in its previous
quarter, and the $3 billion U.S. it earned in the year ago period.
The company said in a written statement that an ongoing parts shortage will keep its inventory
of half-completed vehicles elevated in the coming months.
Ford is the latest in a series of companies to warn of deteriorating earnings in the face of
macroeconomic headwinds. FedEx (FDX), General Electric (GE) and McDonald’s (MCD) have
each warned of waning demand, supply-chain issues, and inflation in recent weeks.
Ford now estimates that its number of partially completed vehicles will total 40,000 to 45,000 at
the end of the current third quarter. The company said it remains confident that it will complete
those vehicles by year’s end.
Ford said it now expects to earn $11.5 billion U.S. to $12.5 billion U.S. for the full year,
unchanged from its previous guidance.
The automaker will provide more information about its finances when it issues its next earnings
results on October 26.
Ford stock is down 31% this year and trading at $14.93 U.S. per share.
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