Ford profit drops 50 percent because of a global chip shortage.
Ford Motor said on Wednesday that its profit for the three months ending in June fell about 50%, to $ 561 million, largely because a global shortage of computer chips kept the company from sell more cars and trucks.
The result, however, was not as bad as the automaker had feared. Ford also gave a more optimistic outlook for the full year, saying it now expected adjusted operating profit in the range of $ 9 billion to $ 10 billion, or some $ 3.5 billion. more than he had previously expected.
“We really looked at the allocation of chips to our higher-profit vehicles,” John Lawler, Ford chief financial officer, said in a conference call with reporters. “The prices have remained very high, much higher than we thought. “
Ford said second-quarter revenue of $ 26.8 billion, up 36% from the same period a year earlier, when sales were slowed by the coronavirus pandemic.
For part of that month, Ford had to stop or slow down production of highly profitable models like the F-150 pickup truck and various sport utility vehicles. It also slowed production of the Mustang Mach-E, an electric vehicle Ford relied on to compete with Tesla and gain new customers.
The company said the supply of computer chips would improve in the second half of the year but remain limited. One of its main suppliers, the Japanese company Renesas, is increasing production after a fire at one of its factories this year.
Mr Lawler said Ford has raised its earnings outlook as it now plans to ship 30 percent more vehicles to dealers in the second half of the year than in the first half of the year. Some of these cars will come from the 60,000 to 70,000 vehicles the company has already produced without electronic components. Most of them will be sent to dealers this quarter, he said.
General Motors appeared to be handling the shortage better than Ford, but it also had to cut production of profitable pickup trucks this month. GM releases its second quarter results on August 4.
Tesla reported a record second-quarter profit of $ 1.1 billion on Monday. Although the company was hit by the shortage, it was able to switch to more readily available types of chips.
Still, Tesla chief executive Elon Musk said the chip shortage was limiting the company’s production. “It looks like it’s improving, but it’s hard to predict,” he told analysts on a conference call.
The semiconductor shortage has limited the auto industry’s ability to take full advantage of the strong demand for cars and trucks in the United States.
Ford, in particular, is rolling out several new models it relied on to turn around its struggling business in recent years. The company’s new models include a redesigned F-150, a Bronco SUV, and the Mustang Mach-E. It’s set to add a beefier Bronco SUV and an electric F-150 in the coming months.
#Ford #profit #drops #percent #global #chip #shortage