Ford Motor Co.’s warning last week that its third-quarter earnings will be marred by higher-than-expected supplier costs and a lack of parts is the latest sign of the lingering supply chain woes plaguing the industry.
The automaker said that inflation-related supplier costs during the third quarter will run about $1 billion higher than it had expected. Separately, it expected to finish the period with 40,000 to 45,000 unfinished vehicles waiting on parts, most of which will be high-margin pickups and utility vehicles.
As a result, Ford cautioned that adjusted earnings before interest and taxes will be about half of the $3 billion that analysts had estimated. Ford’s stock suffered its largest one-day decline in more than a decade on the news.
“Ultimately, this news is somewhat surprising as broader macro news suggest supply chains have gotten incrementally better over the last few months,” John Murphy, research analyst at Bank of America Merrill Lynch, said in an investor note.
Adam Jonas, an analyst with Morgan Stanley, said that despite some reports of “marginal improvement” in the automotive supply chain, Ford’s forecast is a sign “that we are not yet out of the woods.”
