Ford Previews Effect of Parts Shortages on Q3 Performance, Reaffirms Full-Year Adjusted EBIT Guidance of $11.5-$12.5B
September 19 2022 - 4:15PM
Business Wire
- Expects to have about 40,000 to 45,000 vehicles in inventory at
end of third quarter lacking certain parts presently in short
supply
- Says “vehicles on wheels” awaiting those parts
disproportionately include high-demand, high-margin models of
popular trucks and SUVs
- Advises that completing such vehicles will shift some revenue
and EBIT to Q4; based on recent negotiations, inflation-related Q3
supply costs will be ~$1.0 billion above plan
- Anticipates Q3 adjusted EBIT of between $1.4 billion and $1.7
billion
Ford again affirmed its expectation for full-year 2022 adjusted
earnings before interest and taxes of between $11.5 billion to
$12.5 billion, despite limits on availability of certain parts as
well as higher payments made to suppliers to account for the
effects of inflation.
The supply shortages will result in a higher-than-planned number
of “vehicles on wheels” built but remaining in Ford’s inventory
awaiting needed parts, at the end of the third quarter. The company
believes that those vehicles – an anticipated 40,000 to 45,000 of
them, largely high-margin trucks and SUVs – will be completed and
sold to dealers during the fourth quarter.
According to the company, based on recent negotiations,
inflation-related supplier costs during the third quarter will run
about $1.0 billion higher than originally expected.
Ford now anticipates third-quarter adjusted EBIT to be in the
range of $1.4 billion and $1.7 billion.
The company intends to announce full third-quarter 2022
financial results – and provide more dimension about expectations
for full-year performance – on Wednesday, Oct. 26.
About Ford Motor Company
Ford Motor Company (NYSE: F) is a global company based in
Dearborn, Michigan, that is committed to helping build a better
world, where every person is free to move and pursue their dreams.
The company’s Ford+ plan for growth and value creation combines
existing strengths, new capabilities and always-on relationships
with customers to enrich experiences for and deepen the loyalty of
those customers. Ford develops and delivers innovative, must-have
Ford trucks, sport utility vehicles commercial vans and cars and
Lincoln luxury vehicles, as well as connected services.
Additionally, Ford is establishing leadership positions in mobility
solutions, including self-driving technology, and provides
financial services through Ford Motor Credit Company. Ford employs
about 182,000 people worldwide. More information about the company,
its products and Ford Credit is available at corporate.ford.com.
Adjusted EBIT is a non-GAAP financial measure. Ford does not
provide guidance on a net income basis, the comparable GAAP
measure. Ford’s net income in 2022 will include potentially
significant special items that have not yet occurred and are
difficult to predict with reasonable certainty, including gains and
losses on pension and OPEB remeasurements and on investments in
equity securities.
Cautionary Note on Forward-Looking
Statements
Statements included or incorporated by reference herein may
constitute “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements are based on expectations, forecasts, and assumptions by
our management and involve a number of risks, uncertainties, and
other factors that could cause actual results to differ materially
from those stated, including, without limitation:
- Ford and Ford Credit’s financial condition and results of
operations have been and may continue to be adversely affected by
public health issues, including epidemics or pandemics such as
COVID-19;
- Ford is highly dependent on its suppliers to deliver components
in accordance with Ford’s production schedule, and a shortage of
key components, such as semiconductors, or raw materials can
disrupt Ford’s production of vehicles;
- Ford’s long-term competitiveness depends on the successful
execution of Ford+;
- Ford’s vehicles could be affected by defects that result in
delays in new model launches, recall campaigns, or increased
warranty costs;
- Ford may not realize the anticipated benefits of existing or
pending strategic alliances, joint ventures, acquisitions,
divestitures, or new business strategies;
- Operational systems, security systems, vehicles, and services
could be affected by cyber incidents, ransomware attacks, and other
disruptions;
- Ford’s production, as well as Ford’s suppliers’ production,
could be disrupted by labor issues, natural or man-made disasters,
financial distress, production difficulties, capacity limitations,
or other factors;
- Ford’s ability to maintain a competitive cost structure could
be affected by labor or other constraints;
- Ford’s ability to attract and retain talented, diverse, and
highly skilled employees is critical to its success and
competitiveness;
- Ford’s new and existing products, digital and physical
services, and mobility services are subject to market acceptance
and face significant competition from existing and new entrants in
the automotive, mobility, and digital services industries;
- Ford’s near-term results are dependent on sales of larger, more
profitable vehicles, particularly in the United States;
- With a global footprint, Ford’s results could be adversely
affected by economic, geopolitical, protectionist trade policies,
or other events, including tariffs;
- Industry sales volume in any of Ford’s key markets can be
volatile and could decline if there is a financial crisis,
recession, or significant geopolitical event;
- Ford may face increased price competition or a reduction in
demand for its products resulting from industry excess capacity,
currency fluctuations, competitive actions, or other factors;
- Inflationary pressure and fluctuations in commodity prices,
foreign currency exchange rates, interest rates, and market value
of Ford or Ford Credit’s investments, including marketable
securities, can have a significant effect on results;
- Ford and Ford Credit’s access to debt, securitization, or
derivative markets around the world at competitive rates or in
sufficient amounts could be affected by credit rating downgrades,
market volatility, market disruption, regulatory requirements, or
other factors;
- Ford’s receipt of government incentives could be subject to
reduction, termination, or clawback;
- Ford Credit could experience higher-than-expected credit
losses, lower-than-anticipated residual values, or
higher-than-expected return volumes for leased vehicles;
- Economic and demographic experience for pension and other
postretirement benefit plans (e.g., discount rates or investment
returns) could be worse than Ford has assumed;
- Pension and other postretirement liabilities could adversely
affect Ford’s liquidity and financial condition;
- Ford and Ford Credit could experience unusual or significant
litigation, governmental investigations, or adverse publicity
arising out of alleged defects in products, services, perceived
environmental impacts, or otherwise;
- Ford may need to substantially modify its product plans to
comply with safety, emissions, fuel economy, autonomous vehicle,
and other regulations;
- Ford and Ford Credit could be affected by the continued
development of more stringent privacy, data use, and data
protection laws and regulations as well as consumers’ heightened
expectations to safeguard their personal information; and
- Ford Credit could be subject to new or increased credit
regulations, consumer protection regulations, or other
regulations.
We cannot be certain that any expectation, forecast, or
assumption made in preparing forward-looking statements will prove
accurate, or that any projection will be realized. It is to be
expected that there may be differences between projected and actual
results. Our forward-looking statements speak only as of the date
of their initial issuance, and we do not undertake any obligation
to update or revise publicly any forward-looking statement, whether
as a result of new information, future events, or otherwise. For
additional discussion, see “Item 1A. Risk Factors” in our Annual
Report on Form 10-K for the year ended December 31, 2021, as
updated by subsequent Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K.
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Media T.R. Reid 1.313.319.6683
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