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Ford revealed the Q3 guidance on Monday, and one of the most disturbing facts was the massive number of unfinished vehicles waiting for missing parts. This shows that the problem is getting worse, not better.
The pesky semiconductor shortage problem pushed the carmakers, Ford included, into a corner. Faced with the prospect of stopping the production lines, Ford decided to go ahead and build the vehicles without the missing components. They were meant to be installed as they became available. In the meantime, the cars were stored around assembly plants. That’s why we’ve seen those pictures of countless Ford Broncos and F-150 Lightning trucks clogging the overflow parking lots around the assembly plants.
Although Ford promised to catch up and eventually clear the lots, it seems like the problem won’t go away. In the Q3 guidance released Monday, Ford warned investors that it sits on around 40,000 to 45,000 unfinished vehicles waiting for parts. Most of those vehicles are high-margin trucks and utility vehicles, so this seems like a problem for Ford. The numbers are impressive, especially when compared to the 18,000 unfinished vehicles at the end of the second quarter.
According to Automotive News, Ford will report the Q3 earnings on October 26. The carmaker reaffirmed its full-year guidance of $11.5 billion to $12.5 billion in adjusted earnings before interest and taxes (EBIT). This is 15 to 25 percent more than it earned in 2021, which seems like good news. The problem is that Ford’s margins have been eaten by inflation, which caused the Q3 results to sink.
For the three months ending on September 30, Ford expects to report between $1.4 billion and $1.7 billion in adjusted EBIT, down from the $3 billion posted over the same period a year ago. Ford’s estimates are also below the analysts’ forecasts of around $2,98 billion. This is due to inflation-related supplier costs running about $1 billion higher than initially expected during the third quarter.
Although Ford promised to catch up and eventually clear the lots, it seems like the problem won’t go away. In the Q3 guidance released Monday, Ford warned investors that it sits on around 40,000 to 45,000 unfinished vehicles waiting for parts. Most of those vehicles are high-margin trucks and utility vehicles, so this seems like a problem for Ford. The numbers are impressive, especially when compared to the 18,000 unfinished vehicles at the end of the second quarter.
According to Automotive News, Ford will report the Q3 earnings on October 26. The carmaker reaffirmed its full-year guidance of $11.5 billion to $12.5 billion in adjusted earnings before interest and taxes (EBIT). This is 15 to 25 percent more than it earned in 2021, which seems like good news. The problem is that Ford’s margins have been eaten by inflation, which caused the Q3 results to sink.
For the three months ending on September 30, Ford expects to report between $1.4 billion and $1.7 billion in adjusted EBIT, down from the $3 billion posted over the same period a year ago. Ford’s estimates are also below the analysts’ forecasts of around $2,98 billion. This is due to inflation-related supplier costs running about $1 billion higher than initially expected during the third quarter.
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