After the Ford Motor Company (NYSE:F) warned that clogged supply chains will hurt its third-quarter bottom line.
Even with “limitations on the availability of some parts as well as additional payments to suppliers account for the effects of inflation,” Ford reiterated its full-year profit prediction, which includes operational earnings of between $11.5 billion and $12.5 billion.
According to Ford, these restrictions will probably result in a $1 billion increase in inflation-related supplier costs. The automaker also stated that up to 45,000 vehicles missing specific parts, delaying their sale until the year’s final months, will still be in its inventory.
Both its third-quarter revenues and its adjusted earnings, which it expects to be in the range of $1.4 billion and $1.7 billion, will suffer as a result. On October 26, Ford Motor Company (NYSE:F) will release its third-quarter financial results.
Future of Ford Motor Company Stock
According to Benchmark analyst Michael Ward, who has a ‘buy’ rating on the company and a $23 price target, “the vehicles waiting on components will move an estimated $2.5 billion of revenue from the third quarter into the fourth quarter.” “Most costs associated with producing the automobiles have been recorded at the time of production. However, income is recognized when the vehicle is delivered to the dealer and prepared for sale to a consumer.”
During Tuesday’s midday trading, Ford shares were down 10.2%, changing hands at $13.42, bringing the stock’s six-month fall to about 18.5%.
Ford Motor Company (NYSE:F) warned that rising input prices and currency headwinds will squeeze near-term margins as it disclosed plans to cut up to 3,000 jobs, with the majority of the cuts affecting paid workers in the U.S. and Canada.
In addition to providing a profit forecast for the entire year and reiterating its concerns about rising costs, Ford released stronger-than-anticipated second-quarter financial results in July.
As price gains offset pressure on input costs and currency challenges, Ford reported that its adjusted earnings for the June quarter increased more than five-fold from last year to 68 cents per share, far exceeding Street expectations. Ford Motor Company (NYSE:F) reported that group revenues increased 66.5% to $40.22 billion and that first-half free cash flow was projected to be about $3 billion.
The company increased its quarterly dividend to 15 cents per share, returning distribution levels to those before the pandemic.
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