The shares of Ford Motor Co. fell more than 5% during the extended session Monday after the company said inflation and parts shortages will leave it with more unfinished vehicles than it anticipated, recalling that the problems in Wall Street’s supply chain are far from over for car manufacturers.
said it expects to have between 40,000 and 45,000 vehicles in stock by the end of the third quarter “with certain parts missing that are currently in short supply.”
The automaker also said that based on recent negotiations, payments to suppliers will be about $1 billion higher than expected for the quarter, thanks to inflation. However, the company confirmed its outlook for the year.
Ford’s warning “is proof that there are still auto parts shortages and supply chain problems,” CFRA analyst Garrett Nelson told MarketWatch.
Many investors began to believe that “these problems were in the rearview mirror as stocks began to recover from the record lows of the past year or so,” Nelson said.
The unfinished vehicles include in-demand, high-margin models of popular trucks and SUVs, Ford said. As a result, some shipments and revenues are shifting to the fourth quarter.
“Ironically, Ford may have fallen victim to its own success, as recent US sales growth has outperformed its competitors by a large margin,” Nelson said. Third quarter production was “apparently unable to keep up with demand.”
Ford reiterated expectations of full-year 2022 adjusted earnings before interest and taxes of between $11.5 billion and $12.5 billion, despite deficits and higher payments to suppliers, it said.
Ford called for adjusted EBIT for the third quarter of between $1.4 billion and $1.7 billion.
Shares of Ford ended the regular trading day up 1.4%. The company has embarked on a reorganization to switch to electric vehicles and last month confirmed layoffs related to its new structure.
Ford plans to release its third quarter financial results on October 26, when it said it expects to “add more dimension to expectations for full-year performance.”
Analysts polled by FactSet expect the automaker to report adjusted earnings of 51 cents per share, corresponding to adjusted EPS for the third quarter of 2021, on revenue of $38.8 billion.
Quarterly revenue would be comparable to revenue of $35.7 billion in the same period a year ago.
Shares of Ford have lost 28% so far this year, compared to losses of 18% for the S&P 500 index SPX,
The news comes a week after FedEx Corp. FDX,
stirred markets and raised fears of an economic slowdown by withdrawing the outlook for the year and warning that the year was likely to get worse for the company.