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Ford and GM’s profits decline with sales due to chip shortage

Detroit — Global Computer Shortage of chips Both cut third-quarter profits Ford And crosstown rivals General Motors, Both companies have to temporarily close the factory, picking up supplies dealer a lot.

Ford’s $ 1.83 billion net profit fell 23% from a year ago, GM’s Profit fell 40% to $ 2.4 billion.mainly pick-up truck And the big SUVs sold by automakers eased the puncture wounds from the decline in sales.

Ford, which reported results after Wednesday’s Closing Bell, said it would resume paying a dime of 10 cents per share from the fourth quarter. It costs about $ 400 million quarterly. Ford stock Aftermarket trading surged 7.5%.

According to the company, sales were down 5% from a year ago to $ 35.68 billion. This did not reach Wall Street’s estimate of $ 38.2 billion.

The company in Dearborn, Michigan, earned 51 cents per share, excluding temporary items, higher than FactSet polled analysts expected at 27 cents.

Ford’s sales fell 27% from July to September in the most profitable market, the United States. The company also lost 2.4 percent of its US market share, largely because it couldn’t produce enough vehicles to meet demand, like GM.

But the average Ford New car According to Edmunds.com, it sold for over $ 51,000 during the quarter, up almost 13% from a year ago.

Chief Financial Officer John Lawler said Ford has cash and income to invest Electric car And services. He said the company was confident in the trajectory of its business.

“It provides us with financial flexibility to fully fund our plans and all other capital needs. We value dividends as well as stock prices, and all shareholders. We are also focusing on profits. “

Laura said there was strong demand for Ford’s products that the company couldn’t meet due to a lack of chips.Worldwide, he said he thinks the company can sell 200,000 Mustang Mach-E Annual electric SUV.

He said the tip shortage should ease a bit from October to December and sales to dealers should increase by 10% this quarter from the previous quarter. Supply will improve, but the shortage will continue next year, and perhaps until 2023, he said.

Ford said it plans to raise its full-year pre-tax profit outlook from $ 10.5 billion to $ 11.5 billion and plan to invest between $ 40 billion and $ 45 billion between 2020 and 2025. period.

However, Roller warned that the company is facing higher material and freight costs. Commodity costs such as steel are expected to increase from $ 3 billion to $ 3.5 billion this year and another $ 1.5 billion next year.

GM

GM’s revenue fell from $ 4 billion last year as sales fell and it lost market share in the most profitable country, the United States. Revenues fell 25% to $ 26.78 billion in the quarter.

GM CEO Mary BarraMeanwhile, in a conference call with analysts, she said she was “quite confident” about GM’s San Francisco-based cruise. Self-driving car The subsidiary will carry passengers sometime next year without a safe human driver. To do so, Cruise requires a final permit from the California regulatory agency.

Rose also told reporters Wednesday that a global shortage of semiconductors and the outbreak of COVID at supplier factories hit the company in the third quarter. “It still remains somewhat unstable,” she said.

However, GM has seen improvement this quarter, with additional supplies expected in the first three months of 2022.

GM expects production in the second half of this year to be about 200,000 less than in the first half, with most of the impact coming from July to September.

Mr. Rose has spoken to the CEOs of most major chip makers and said the two companies are working on strategies to prevent the shortage from happening again. “I’m sure there will be changes to ensure the right supply,” she said.

Third-quarter US sales were down almost 33% compared to a year ago, but GM’s profits increased. According to Edmonds, the company has lost 3.8 percent of its US market share.

However, Mr. Rose said he expects GM’s market share to recover when the factory returns to normal production. “We sell everything we can. I wish I had more cars,” she said.

Consumers’ willingness to pay high for rare new cars continued to fund GM. According to Edmonds, the average selling price paid for GM cars has risen by more than 16% from a year ago to over $ 50,000. Rose said he hopes higher prices will ease as supply increases.

With the expected improvement in chip supply, GM has raised its full-year net income guidance from $ 8.1 billion to $ 9.6 billion. In the second quarter, there were forecasts of $ 7.7 billion to $ 9.2 billion annually.

GM’s share price fell 5.4% on Wednesday to close at $ 54.26.

Ford and GM’s profits decline with sales due to chip shortage

Source link Ford and GM’s profits decline with sales due to chip shortage

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