Ford Stock Slides As Chip Crunch Idles More North American Plants
[ad_1]
Ford (F) – Get Ford Motor Company Report shares extended declines Monday after the carmaker said it will halt production at eight north American factories, including one that produces the F-150 pickup, for at least the next week amid the ongoing shortage in semiconductor supplies.
The moves followed less than a day after the company missed Street forecasts for its fourth quarter earnings while cautioning that supply chain disruptions and surging input costs would linger in the new year. Ford also warned customers that in late January that it would stop taking retail orders for the Maverick amid a production backlog for the newly-unveiled hybrid pickup.
The shutdowns will likely test investor patience for Ford’s plans to deepen its investment in electric vehicle production and double its current output by 2023 as it takes on both market leader Tesla (TSLA) – Get Tesla Inc Report and larger OEM rival General Motors (GM) – Get General Motors Company Report.
Ford, which is deepening its investment in electric vehicle production and plans to double its current output by 2023, sees earnings growth this year of between 15% and 20%, but that failed to lift investors’ spirts after a weaker-than-expected fourth quarter tally of 26 cents per share that was well shy of analysts’ estimates.
“Supply chains limited what we could produce and what we could provide,” CFO John Lawler told investors on a conference call late last week. “And we see that easing into ’22, and you’ll see that flowing through our profits.”
“We expect supply constraints to remain fluid throughout the year, reflecting a variety of factors, including semiconductors and Covid,” he added. “We expect commodity headwinds of about $1.5 billion to $2 billion )(and) anticipate other inflationary pressures, which will impact a broad range of costs.”
Ford shares, which have fallen 28.7% since passing the $100 billion market cap threshold on January 14, were marked 0.5% lower pre-market trading Monday to indicate an opening bell price of $17.87 each.
“While Ford’s 4Q miss was disappointing, we believe the focus of the 4Q print should be a ’22 guide which shows Ford is continuing its path of improvement – with growth in the face of OEM peak earnings concerns,” said Credit Suisse analyst Dan Levy, who carries an “outperform” rating with a $25 price target on the stock
“2021 as a whole showed the significant turnaround underway at Ford, and one which has occurred within a short period of time, with Ford setting a new track record of financial outperformance, and showing that its transition to an EV/AV/digital world has sharply accelerated,” he added. “Changing perception on both these fronts is critical, as near-term financial strength is supporting better funding of Ford’s long-term transition.”
[ad_2]
Read More: Ford Stock Slides As Chip Crunch Idles More North American Plants