July 23, 2024

Parts shortage forces Ford to cut its 3Q earnings forecast

DEARBORN, Mich. (AP) — A parts shortage that has thousands of Ford’s most-profitable vehicles sitting on lots waiting to be fully assembled has forced the automaker to slash its third-quarter earnings forecast.

Ford said Sept. 19 that it expects to have 40,000 to 45,000 unfinished vehicles on its hands when the quarter ends Sept. 30. Most of those are SUVs and popular truck models, which are some of Ford’s biggest money makers.

The company based in Dearborn, Michigan, now expects its third-quarter earnings before interest and taxes to be between $1.4 billion and $1.7 billion.

It reported adjusted earnings before interest and taxes of $3.7 billion in the second quarter. Its stock fell almost 5% in after-hours trading Sept. 19.

The company did, however, say it expected the vehicles that it couldn’t fully assemble in the third quarter to be completed and sold to dealers in the final three months of the year. As a result, it reaffirmed its full-year 2022 profit forecast of $11.5 billion to $12.5 billion.

A global shortage of computer chips has hobbled automakers’ ability to fully assemble vehicles and meet high buyer demand.

General Motors said in July that shortages of chips and other parts forced it to build 95,000 vehicles without one part or another. It also said that its incomplete vehicles are expected to be finished and sold by the end of the year.

Ford also said that its inflation-related supplier costs for the third quarter were about $1 billion above what it had been planning for.