Ford released its Q3 financial report on Thursday, stating that its third quarter earnings did not meet expectations due to rising costs and declining quality.
Ford CEO Jim Farley stated that in addition to the negative impact of the strike, Ford has also dragged down its business due to costs and product quality.
Ford's Chief Financial Officer, John Lawler, pointed out that since the United Auto Workers (UAW) announced a strike on September 15th, the company has lost $100 million in the third quarter, with a cumulative loss of $1.3 billion so far. The latest contract between Ford and UAW will increase the cost of each car by an additional $850 to $950, thereby reducing profits by 60 to 70 basis points.
According to Ford's financial report, it has lowered its adjusted pre interest and tax profit forecast for the fiscal year to between $11 billion and $12 billion. As of the close of the US stock market on Thursday, Ford's stock price fell 1.65%; After the post market financial report was released, the stock price continued to decline by 3.2%.
Electric vehicles in trouble
Farley said when discussing the strike, Ford's business this quarter has been mixed. Strikes are a challenging situation, but Ford never lacks challenges.
Ford's Q3 revenue reached $43.8 billion, higher than analyst expectations of $41 billion; Meanwhile, the company's adjusted earnings per share were 39 cents, 9 cents higher than the same period last year, but less than analysts' expectations of $47.
Lawler explained that Ford's quality issues in the third quarter were more challenging, with approximately 50000 cars being shelved due to defects or malfunctions.
From a sub sector perspective, Ford's electric vehicle business is clearly facing some difficulties. The Q3 electric vehicle division suffered a loss of $1.33 billion in pre interest and tax profit, exceeding analysts' expectations of a loss of $1.27 billion. And the sales of the star product F-150 Lightning electric pickup truck plummeted by 46% in Q3.
Ford also pointed out that its plan to collaborate with South Korean company SK ON to build a second battery factory has been postponed, and the production of the electric Mustang Mach-E at the Mexican factory has been cautiously reduced. Other influencing factors include quality issues and temporary layoffs caused by strikes.
The traditional internal combustion engine sector performed relatively steadily, with a pre interest and tax profit of $1.72 billion in the third quarter, lower than the average analyst expectation of $1.94 billion. The sales of gasoline powered vehicles increased by 7.7% this quarter, mainly led by models such as the Bronco SUV and F-150 pickup truck.