Ford Motor Company has warned investors that an extra $1 billion in costs will be incurred in the third quarter as a result of inflation and supply chain problems.
Ford said that the supply chain issues it is facing has resulted in a parts shortage that is affecting nearly 45,000 vehicles. Most of these vehicles are trucks and SUVs that have been unable to reach dealers.
The company is expecting to complete and deliver the vehicles to dealers in the fourth quarter and is projecting adjusted earnings before interest and taxes in 2022 between $11.5 billion and $12.5 billion.
Ford’s shares fell about 5% as a result of the news.
Third-quarter adjusted earnings before interest and taxes for Ford are anticipated to be in the range of $1.4 billion to $1.7 billion.
Ford confirmed that its executives will “provide more dimension about expectations for full-year performance” when it reports the third-quarter results on October 26.
The supply chain issues have been consistently impacting businesses across the world since the COVID-19 pandemic stalled shipments between different countries. The supply chain problems have greatly impacted semiconductor chips as well, leading to price hikes across industries.
Automakers have been battling supply chain problems since the coronavirus pandemic brought manufacturing to a standstill in early 2020. Demand continued to be strong despite ongoing issues with the availability of parts, specifically, semiconductor chips.
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