Ford (F) Stock Slumps on Inflation Warning

  • Ford (F) stock is dropping after warning investors about inflation effects.
  • That includes unexpected costs in the upcoming quarter.
  • Supply-chain issues are also a problem for the legacy automaker.
Ford dealership sign against a blue sky representing F Stock.

Source: D K Grove / Shutterstock.com

Ford (NYSE:F) stock is falling on Tuesday following an inflation warning from the automobile manufacturer.

According to Ford, inflation is causing problems for its supply chain and will affect the company’s upcoming earnings report. That includes a lower adjusted EBIT of between $1.4 billion and $1.7 billion in the third quarter of 2022.

Ford notes that this is due to an expected $1 billion increase in supplier costs as a result of inflation. Even so, the company continues to maintain its adjusted EBIT range of $11.5 billion to $12.5 billion for full-year 2022.

More Than Just Inflation Is Hitting F Stock

Another factor affecting Ford is supply-chain issues. This has left the company with vehicles that can’t be completed due to the necessary parts being missing. That has it estimating between 40,000 to 45,000 incomplete vehicles in its inventory at the end of Q3 2022.

Ford does note that this has it expecting to deliver those vehicles to dealers in Q4. It also mentions that a large portion of them are high-margin units, such as trucks and SUVs.

Investors will have to wait until Ford releases its Q3 earnings report on Oct. 26 for more details. The company also intends to provide more insight into expectations for the full year of 2022 at that time.

It’s worth noting that F stock is already trading more than 55 million units as of this writing. That’s quickly gaining on the automotive company’s daily average trading volume of about 61 million shares.

F stock is down 9.4% as of Tuesday morning.

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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


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