Ford Motor on Wednesday said it expects a worldwide semiconductor shortage to ease this summer but may not be fully resolved until the next year.
The automaker reported a strong first-quarter profit but said the shortage may reduce second-quarter production by half.
The automaker said the ongoing chip shortage would cost it about $2.5 billion and about 1.1 million units of lost production in this year.
The automaker has beaten Wall Street’s profit estimate for the quarter, earning 81 cents a share, compared with the consensus 21 cents. In last year’s first quarter, the automaker lost 50 cents a share.
Ford CEO Jim Farley said: “There are more whitewater moments ahead for us that we have to navigate. The semiconductor shortage and the impact to production will get worse before it gets better. In fact, we believe our second quarter will be the trough for this year.”
The chip shortage, which has hit automakers worldwide, emerges from a confluence of factors as automakers, which closed plants for two months during the coronavirus pandemic last year, rival against the sprawling consumer electronics industry for chip supplies.
Chief Financial Officer John Lawler said the automaker’s outlook was mainly driven by a factory fire suffered by Japanese chipmaker Renesas. The flow of chips from Renesas is expected to be restored in July, but the worldwide shortage of automotive semiconductors may not be fully resolved until next year, Lawler said.
The automaker said its net income of $3.3 billion was the best since 2011, and adjusted pre-tax profit was a record $4.8 billion, including a $900 million non-cash gain on its investment in Rivian.
Ford lost $2.0 billion in the first quarter of 2020.
The automaker added that the chip shortage will reduce full-year revenues before interest and taxes to $5.5 billion-$6.5 billion.