Stonks: Ford Flails on Forecast
Holders of Ford stock were disappointed this week when Blue Oval shares sank on news that supply chain issues and inflation will likely eat into Q3 results. The stock nosedived 12 percent on Tuesday, one of its sharpest falls in a decade.
The company was upfront about its fortunes, saying yesterday that parts shortages had delayed deliveries of new cars and inflation-related costs would be an eye-watering $1 billion more than expected for the quarter. Turns out it’s more than the prices of milk and bacon which have shot to the moon. In all, Ford shares slumped 12 percent on Tuesday to just a hair over 13 dollars. In trading today, it has recouped some of those losses; at the time of this writing, the stock stood at $13.50, clawing back roughly one-third of the losses.
This is newsworthy because many talking heads were expecting the chip headaches and parts shortages to have sorted themselves out by now. By most accounts, they have not. These issues hit the bottom line of automakers and are costly on their own; adding inflation to the mix makes the financials even more volatile.
All the same, Ford stands by its so-called ‘full year guidance’ which is a term used by numbers nerds to speak about how a large company expects to find the condition of its books at year-end. This could signal confidence from corner offices that Ford expects these issues (particularly the parked, chipless vehicles) to be temporary, simply pushing sales into the next quarter and having it all come out in the wash. With today’s partial recoup of stick price, it seems some on Wall Street agree despite yesterday’s profit warning.
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VoGhost on Sep 22, 2022
What Ford has done well is to make vehicles Americans want to buy. I thought they were crazy to abandon sedans, but it worked for them. They moved the resources that were engineering cars over to introducing the Bronco, Bronco Sport, Maverick, Lightening and Mach-e, all of which are in high demand.
Where Ford screwed up is with supply chain resilience, where their inability to meet demand for these products, and inability to contain costs is becoming a real liability.
Arthur Dailey on Sep 22, 2022
What 'competitor' currently exists for the Maverick in North America? The Santa Cruz at least in Canada is in a different price bracket and appears to be more 'style over substance'. The Maverick's hybrid powertrain has been proven over a number of years and many millions of miles in other Ford vehicles.
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