(Reuters) - Shares of U.S. automaker Ford Motor (NYSE:F) Co fell more than 10% on Thursday, after it warned the global semiconductor chip shortage could cut its second-quarter vehicle production in half, a dour outlook for rivals and key suppliers.
Analysts said the chip shortage is getting worse as Ford also reduced its full-year earnings before interest and taxes outlook even after handily beating Wall Street's profit estimate for the first quarter, helped by pricing gains.
"Ford joins a growing chorus saying the semiconductor issue won't be resolved until 2022," RBC Capital Markets analyst Joseph Spak wrote in a note.
The chip shortage has forced U.S. automakers to cut production of less profitable vehicles, while allowing them to raise prices on their most profitable ones as demand surges, offsetting the production loss.
Analysts say that trend won't last long and prices will come down later in the year, as the supply of chips becomes normal.
Shares of Ford's larger rival General Motors Co (NYSE:GM) also fell over 4% on Thursday.
Ford's lower second-quarter production is likely to weigh on suppliers such as Visteon (NASDAQ:VC), BorgWarner (NYSE:BWA), Tenneco, Lear (NYSE:LEA) Corp, Adient (NYSE:ADNT) Plc, RBC's Spak said.
Shares of the suppliers fell between 1% and 5% in morning trading.
"While we believe Ford has every opportunity to execute a path that could achieve our $18 bull case valuation, we remain 'underweight' at this time given our elevated concerns around auto industry expectations broadly," Morgan Stanley (NYSE:MS) analyst Adam Jonas wrote in a note.
Shares of Ford fell as much as 10.4% to $11.14, posting their biggest one-day loss in more than ten months. Ford's stock is still up about 30% this year.