Ford warns investors of an extra $1 billion in supply chain costs during the third quarter

2023 Ford F-150 Raptor R

Ford

DETROIT – Ford Motor on Monday warned investors that the company expects to incur $1 billion more in costs than previously expected during the third quarter due to increased costs and supply chain issues.

Ford said supply problems have resulted in parts shortages affecting roughly 40,000 to 45,000 vehicles that haven’t been able to reach dealers.

The company expects to complete and deliver the vehicles to dealers in the fourth quarter and is still projecting 2022 adjusted earnings before interest and taxes of between $11.5 billion to $12.5 billion.

Shares of the company fell about 5% in extended trading following the update.

Ford said based on recent negotiations, inflation-related supplier costs during the third quarter will run about $1 billion higher than originally expected.

The automaker anticipates third-quarter adjusted earnings before interest and taxes to be in the range of $1.4 billion to $1.7 billion.

The company said executives will “provide more dimension about expectations for full-year performance” when the automaker reports its third-quarter results on Oct. 26.

Automakers have been battling supply chain problems since the coronavirus pandemic brought manufacturing to a standstill in early 2020. Demand continued to be strong, followed by ongoing issues with the availability of parts, specifically, semiconductor chips.

This is breaking news. Please check back for updates.

(With Inputs from cnbc)

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