Ford Motor Co. (F) has reported disappointing third-quarter financial results and pulled its forward guidance due to a six-week labour strike at its U.S. manufacturing facilities.
Ford estimates that the strike undertaken by the United Auto Workers (UAW) cost it $1.3 billion U.S. However, Ford’s Q3 print comes a day after the Detroit automaker reached a tentative deal with the union, bringing the strike to an end.
Citing the UAW strike, Ford pulled its forward guidance for the remainder of this year. That guidance had previously forecast earnings of $11 billion U.S. to $12 billion U.S. and free cash flow of $6.5 billion U.S. to $7 billion U.S.
For Q3 of this year, Ford reported earnings per share (EPS) of $0.39 U.S. compared to $0.45 U.S. that had been expected on Wall Street, according to data from LSEG, formerly Refinitiv.
Revenue in the quarter totaled $41.18 billion U.S. versus $41.22 billion U.S. that was expected.
The company blamed its poor results on the union strike over the last six weeks. Ford said it lost production of about 80,000 vehicles due to the strike and added that restarting production now will be a great deal of work.
Ford’s traditional vehicle manufacturing business, known as Ford Blue, earned $1.72 billion U.S. during Q3, while its Ford Pro commercial business earned $1.65 billion U.S.
The company’s electric vehicle unit posted a $1.33 billion loss in the July through September quarter.
Ford said that it plans to delay about $12 billion U.S. in previously announced electric vehicle investments, including postponing construction of an electric vehicle battery plant in Kentucky, due to the strike.
The automaker added that the new collective agreement with the UAW, if ratified by members, will add $850 U.S. to $900 U.S. to the cost of future vehicles.
Analysts at Deutsche Bank (DB) have calculated that the new labour deal, which runs over four and a half years, will cost Ford $6.2 billion U.S.
The new collective agreement provides 25% pay increases over the length of the agreement, including an initial increase of 11%.
Ford’s stock is down 4% following the Q3 print. Prior to today (Oct. 27), the company’s share price had fallen 13% over the last 12 months to trade at $11.35 U.S. per share.
