stockmarketwalk Ford Motor’s stock had the worst trading day since 2011, after the automaker warned investors that the rising supplier costs and supply chain issues will have a significant negative impact on its current-quarter results.
In addition, Ford estimates that it will have 40,000 to 45,000 vehicles stuck in its inventory due to lacking parts. Primarily high-margin trucks and SUVs are affected that couldn’t reach dealers.
The company has also confirmed its 2022 guidance for adjusted earnings before interest and taxes of $11.5 billion to $12.5 billion. The company has already warned investors that the raw material costs are expected to increase by additional $4 billion in the fiscal year.
Despite the struggles and additional costs, Ford confirmed its guidance for the year but set guidance for third-quarter adjusted earnings before interest and taxes at $1.4 billion to $1.7 billion. That would be well below the forecasts of quarterly earnings of $3 billion. The third-quarter results will be release on October 26th.
Ford is not the only automaker company to warn of the impact of worsening global economic conditions, but the company remains confident these issues are temporary. Ford also said it expects to have thousands of vehicles mostly completed but awaiting key parts by the end of the quarter, which will cost the company billions in delayed sales.
With Tuesday’s drop of 12.3%, Ford has lost $7 billion in market value. The company’s stock has decreased in its value by about 45% since the beginning of this year.
Source: CNBC
