F - Why Did Ford Stock Drop 26.5% In September?
Ford stock ( NYSE:F ) is in the process of revamping. Under the Ford+ banner, the business will run three distinct parts beginning next year.
The carmaker is grappling with increased costs and other supply chain challenges as it prepares to divide its heritage internal combustion engine brands, new fully electric cars (EVs), and commercial and government client sales. According to S&P Global Market Intelligence data, investors are not optimistic about the company’s ability to turn things around any time soon, driving its shares down 26.5% last month.
Ford Stock: what’s the deal with Ford?
The biggest driver of Ford stock ( NYSE:F ) September drop was a September 19 report in which Ford warned investors that it would absorb $1 billion in unplanned supply chain expenses in the third quarter. The business also said that due to supply chain interruptions, it would end the quarter with between 40,000 and 45,000 cars in inventory, awaiting certain critical components before they could be finished.
So, what now?
Management attempted to calm market fears by reiterating its forecast for 2022 adjusted earnings before interest and taxes (EBIT) of between $11.5 billion and $12.5 billion. However, it would have to compensate for the additional expenditures. These expenses have also risen. In its second-quarter report, Ford raised its projection for inflation-related spending to $3 billion . That was $1 billion more than it had anticipated only a few months ago, and it has already increased its predicted expenses by another $1 billion.
Following the third-qua...
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