Ford was forced to lower its third-quarter profitability prediction due to a components shortfall that has left thousands of its most profitable vehicles lying on lots while awaiting final assembly.
AP — DEARBORN, Mich. Ford was forced to lower its third-quarter profitability prediction due to a components shortfall that has left thousands of its most profitable vehicles lying on lots while awaiting final assembly.
When the quarter concludes on September 30, Ford expects to have 40,000 to 45,000 incomplete automobiles on its hands. Most of them are popular truck and SUV models, which are among Ford’s top revenue generators.
The Dearborn, Michigan-based company’s revised third-quarter earnings before interest and taxes estimate ranges from $1.4 billion to $1.7 billion. In the second quarter, it posted adjusted earnings before interest and taxes of $3.7 billion.
In Monday’s after-hours trade, its shares decreased by about 5%.
However, the company did state that it anticipated completing and selling to dealers the automobiles that it was unable to fully construct in the third quarter in the following three months. As a result, it maintained its $11.5 billion to $12.5 billion full-year profit expectation for 2022.
The ability of automakers to completely construct vehicles and satisfy rising consumer demand has been hampered by a global shortage of computer chips. General Motors claimed in July that it had to assemble 95,000 vehicles missing one or more components due to a scarcity of processors and other parts. Additionally, it stated that by the end of the year, its unfinished automobiles should be finished and available for purchase.
Ford also disclosed on Monday that its third-quarter supplier expenses attributable to inflation were nearly $1 billion higher than anticipated.
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