Ford Motor Company’s electric F-150 Lightning on the production line at its Rouge Electric Vehicle Center in Dearborn, Michigan, on Sept. 8, 2022.
Jeff Kowalsky | AFP | Getty Images
Shares of Ford Motor traded sharply lower Friday after the corporate reported earnings that missed estimates and said that demand for its electric vehicles was falling wanting expectations.
The stock closed down greater than 12% on Friday.
Ford reported its third-quarter results after the markets closed Thursday, and so they weren’t what Wall Street had expected. Ford’s revenue and profit each fell wanting analysts’ estimates, shortfalls that executives attributed to lost production following the United Auto Employees’ decision to strike three of Ford’s key U.S. factories, including a crucial truck factory in Kentucky.
The outcomes were a stark contrast to rival General Motors‘ third-quarter report Tuesday. GM’s revenue and profit each handily beat Wall Street estimates.
Ford on Wednesday night became the primary of the three Detroit automakers to succeed in a tentative agreement with the UAW. It won a surprising concession that ought to help its fourth-quarter numbers: Striking employees will return to their jobs before the brand new deal is officially ratified.
But Ford’s recent contract can be an expensive one. Chief Financial Officer John Lawler said the UAW deal, if ratified by members, will add $850 to $900 in costs to each vehicle assembled within the U.S. That can put additional pressure on CEO Jim Farley’s ongoing efforts to enhance Ford’s costs and quality.
Ford also said it plans to delay about $12 billion in previously announced spending on EV manufacturing capability, saying that its customers in North America aren’t any longer willing to pay a premium for an EV vehicle versus a comparable internal-combustion or hybrid alternative.
While executives emphasized Ford is not cutting back on or delaying its plans to develop a variety of more advanced EVs, investors concerned in regards to the company’s ability to compete with Tesla and other recent EV entrants got a recent reason for caution.
Ford also withdrew its previous financial guidance for 2023 in light of the pending take care of the UAW.
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