Chaos in the Red Sea Is Starting to Bite Into Companies’ Profits
- Shippers win earnings upgrades, retailers and autos face cuts
- Firms face margin hit if high costs don’t pass to consumers
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With the Red Sea crisis roiling shipments of everything from cars to energy, it’s a matter of time before soaring costs and supply-chain strains show up in companies’ earnings reports.
Several firms are already warning of the impact. Electric-vehicle maker Tesla Inc. plans a two-week production halt at a German plant due shipment delays, while Sweden’s Volvocar AB has announced a three-day stoppage at its Belgian factory. British retailers Tesco Plc, Marks & Spencer Group Plc and Next Plc have all flagged the risk of higher prices for consumers.