The actions of Ford were down more than 12% on Tuesday, a day after the automaker said inflation-related costs would be $1 billion higher in the current quarter than expected and parts shortages delayed deliveries.
By 4:00 pm ET, the stock was down 12.4% to $13.08 apiece, heading for its biggest one-day decline since 2011. At its lowest, it lost 12.8%.
Ford’s preliminary third-quarter results, released on Monday, also led rival General Motors’ shares to tumble 5.4% as analysts said it may take longer for automakers to recover from the chip shortage. .
“It appears that across the industry the shortage of chips and components may be improving at a slower pace than anticipated,” said Emmanuel Rosner, an analyst at Deutsche Bank.
In July, Ford said it expected a $4 billion rise in commodity costs for the year.
The automaker’s warning comes less than a week after delivery company FedEx withdrew its financial forecast due to slowing global demand.
The cases underscore the state of the Federal Reserve (Fed) ahead of its next monetary policy decision on Wednesday.
The majority expectation is that the Fed will raise interest rates by 0.75 percentage point in its battle to contain the highest inflation in decades. But the US central bank’s aggressive monetary policy campaign has hit the stock market, with investors fearing it will hurt the economy.
Ford also estimated that it would have 40,000 to 45,000 vehicles without parts in stock.
The automaker, which is due to release third-quarter results on Oct. 26, reaffirmed its 2022 adjusted earnings before interest and tax forecast of between $11.5 billion and $12.5 billion.
Source: CNN Brasil
Joe Jameson, a technology journalist with over 2 years of experience, writes for top online news websites. Specializing in the field of technology, Joe provides insights into the latest advancements in the industry. Currently, he contributes to covering the world stock market.
