Ford Motor’s stock is on pace for its worst day in more than 11 years, after the automaker pre-released part of its third-quarter earnings report and warned investors of $1 billion in unexpected supplier costs.
Shares of Ford were trading at about $13.10 apiece Tuesday afternoon, down by more than 12%. If the losses hold into the close, it would knock roughly $7 billion off the company’s market value.
It would also be the stock’s worst day on a percentage basis since Jan. 28, 2011, when the automaker’s fourth-quarter earnings disappointed investors and the stock shed 13.4% to close at $16.27 a share, according to data compiled by FactSet.
Ford, after the markets closed Monday, said supply problems have resulted in parts shortages affecting roughly 40,000 to 45,000 vehicles, primarily high-margin trucks and SUVs, that haven’t been able to reach dealers.
Despite the problems and extra cost, Ford affirmed its guidance for the year but set expectations for third-quarter adjusted earnings before interest and taxes to be in the range of $1.4 billion to $1.7 billion. That would be significantly below the forecasts of some analysts, who were projecting quarterly profit closer to $3 billion.
Ford cited recent negotiations resulting in inflation-related supplier costs that will run about $1 billion higher than originally expected.
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