Ford stock suffers worst day since 2011 after cost warning, shedding $7 billion in market value

DETROIT – Ford Motor's banal suffered its worst time successful much than 11 years, aft the automaker pre-released portion of its third-quarter net study and warned investors of $1 cardinal successful unexpected supplier costs.

Shares of Ford closed Tuesday astatine $13.09 apiece, down by 12.3%. The Detroit automaker mislaid astir $7 cardinal disconnected its marketplace value.

It was besides the stock's worst time connected a percent ground since Jan. 28, 2011, erstwhile the automaker's fourth-quarter net disappointed investors and the banal shed 13.4% to adjacent astatine $16.27 a share, according to information compiled by FactSet.

Ford, after the markets closed Monday, said proviso problems person resulted successful parts shortages affecting astir 40,000 to 45,000 vehicles, chiefly high-margin trucks and SUVs that haven't been capable to scope dealers.

Despite the problems and other cost, Ford affirmed its guidance for the twelvemonth but acceptable expectations for third-quarter adjusted net earlier involvement and taxes to beryllium successful the scope of $1.4 cardinal to $1.7 billion. That would beryllium importantly beneath the forecasts of immoderate analysts, who were projecting quarterly nett person to $3 billion.

Ford cited caller negotiations resulting successful inflation-related supplier costs that volition tally astir $1 cardinal higher than primitively expected.

While nary large Wall Street analysts downgraded the banal successful airy of the update, respective were caught disconnected defender by Ford's announcement. Expectations were that proviso concatenation problems were easing. What's more, Ford had precocious been avoiding specified problems amended than immoderate of its competitors.

Goldman Sachs expert Mark Delaney said his steadfast was "surprised by the 3Q pre-announcement fixed the advancement that Ford had antecedently made connected proviso concatenation bottlenecks."

BofA Securities expert John Murphy echoed those feelings successful a enactment to investors Tuesday: "Ultimately, this quality is somewhat astonishing arsenic broader macro quality suggest proviso chains person gotten incrementally amended implicit the past fewer months."

Several analysts questioned whether this was a Ford-specific problem, oregon a reddish emblem for further problems for the automotive industry.

GM CEO Mary Barra connected Tuesday told CNBC that the company's proviso concatenation problems person been easing.

"We are seeing an improved situation," Barra said. "We support working, solving issues, looking for efficiencies arsenic a mean course, and we're going to proceed to bash that."

Barra said GM is connected way to implicit astir 95,000 vehicles successful its inventory by the extremity of this twelvemonth that were manufactured without definite components owed to proviso concatenation problems. In July, GM warned investors that proviso concatenation issues would materially impact its second-quarter earnings, portion similarly maintaining its guidance for 2022.

Ford said its unfinished vehicles are expected to beryllium completed and sent to dealers successful the 4th quarter.

In effect to the Tuesday decline, Ford spokesperson T.R. Reid said the institution continues to present connected its Ford+ restructuring plan.

"Markets are businesslike implicit time," helium said. "We've got a large program astatine Ford+ to make worth for customers, and investors and different stakeholders implicit time. It's our work to execute against it and make that opportunity."

Ford's banal is down much than 36% twelvemonth to day but inactive up astir 2% successful the past 12 months.

— CNBC's Christopher Hayes and Michael Bloom contributed to this report.