- Ford on Wednesday reported a strong quarterly profit for the first quarter of 2021.
- The carmaker said it will build 50% fewer vehicles in the second quarter due to a chip shortage.
- Ford said the supply-chain issue could cost it $2.5 billion in 2021.
- See more stories on Insider’s business page.
Ford on Wednesday reported a strong quarterly profit, but warned that the global semiconductor chip shortage will slash production in the second quarter by 50% before bottoming out and then improving through the year.
The automaker said the global semiconductor shortage would cost it about $2.5 billion in 2021. The company said its annual production will drop by roughly 1.1 million units due to the shortage.
Shares were down 3.3% in after-hours trading on Wednesday.
Ford said its net income of $3.3 billion was the best since 2011, and adjusted pre-tax profit was a record $4.8 billion. Ford lost $2.0 billion in the first quarter of 2020.
The company said the chip shortage will slash full-year earnings before interest and taxes to $5.5 billion-$6.5 billion.
In February, Chief Financial Officer John Lawler said the company was on course to earn $8 billion to $9 billion in adjusted EBIT, including a $900 million noncash gain on its investment in Rivian, the electric vehicle startup.
Revenue in the quarter increase to $36.2 billion, from $34.3 billion a year earlier.
Ford was able to offset some of the impact of lost production in this year’s quarter by boosting average transaction price per vehicle sold to nearly $48,000, compared to just over $44,000 a year ago, according to research firm Edmunds.com.