Stonks: Ford Flails on Forecast

by Matthew Guy

September 21st, 2022 3:27 PM

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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.

[Image: Ford]

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Matthew Guy

Matthew buys, sells, fixes, & races cars. As a human index of auto & auction knowledge, he is fond of making money and offering loud opinions.

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6 of 22 comments

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.

1 Reply
- Jeff S on Sep 24, 2022
  
  JMII--I have a Maverick XLT hybrid and love it but if the Maverick were not available or I couldn't have gotten one I would have bought a Santa Cruz because I wanted a compact pickup and I do use the bed of my truck as I have on all my previous trucks. For my purposes I prefer the Maverick especially have a hybrid which the Santa Cruz does not have. I am glad the Santa Cruz is offered and would like to see other manufactures offer a compact pickup.
  
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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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- VoGhost on Sep 22, 2022
  
  I suspect that looking just at other small pickups as competitors for the Maverick doesn't capture the breadth of its appeal. I would bet you that most Maverick intenders who can't get one aren't buying the Santa Cruz. More likely buying a small crossover or even sedan. They aren't hauling things in the bed on a daily basis; instead they appreciate the price and attitude of the Maverick, and being able to park in normal spots.
  
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- Ajla on Sep 22, 2022
  
  "and appears to be more 'style over substance'."
  i don't think that's quite fair to the Hyundai. It offers decent utility and as the trim prices go up I think it makes a good case for itself. I would buy the Santa Cruz over the Ecoboost Maverick Lariat.
  But that Hybrid XL and XLT version of the Maverick is a killer app that you can't get anywhere else.
  
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- JMII on Sep 23, 2022
  
  Spec wise the Mav and SC in the middle trim levels in the US are basically identical. In Canada you can't get a non-turbo FWD SC so your forced into the most expensive trim immediately.
  As noted the Mav's claim to fame is: cheap + hybrid. However once you start checking option boxes the SC comes out ahead. And yes a fully optioned SC is more expensive but it also has more tech. The biggest swing factor is styling - those that want that boxy truck look think the SC is ugly and thus will not purchase one regardless. I've read countless comments online about these two vehicles and hands down the fans of each draw the line at the styling (both interior and exterior). For example as a SC fan I think the Mav looks outdated and boring.
  
  If you want a small truck - and MANY do - then you have only these two choices. On the SC forums there are plenty of posts from those that have given up on Ford's never ending wait list and picked up a SC instead. While Hyundai can't keep up with demand either their allocation system means a SC could show up at your local lot. For the Mav they are order only and all spoken for. Any sitting on a Ford lot is a dropped order and will be over MSRP for sure.
  
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