Shares of Ford Motor Co. have taken a sharp nosedive after the automaker's second-quarter adjusted profit greatly disappointed Wall Street's forecasts. The company's inadequate financial performance can be attributed to increased expenditure on repairing customers' vehicles, resulting in a significant miss on analysts' estimates.

Late on Wednesday, Ford reported an adjusted profit of 47 cents per share for the second quarter. This figure fell far short of industry analysts' expectations of 68 cents, according to FactSet data. The unexpected shortfall in profits has rattled investors, leading to a selling spree of Ford's shares.

Warranty costs have long been a source of concern for the second-largest automaker in the United States. Over the years, these costs have eaten into billions of dollars in profits. In the second quarter alone, Ford faced $2.3 billion in warranty and recall expenses, which was $800 million more than in the previous quarter and $700 million more than the same period last year.

Ryan Brinkman, an analyst at JPMorgan, noted in an analyst note that Ford's weaker-than-anticipated quarterly profit came as a surprise. In comparison, General Motors had reported a strong financial performance the day before. Brinkman pointed out that warranty costs were the primary factor behind Ford's struggles, exceeding his expectation of flat to lower costs.

While Ford's management believes that the quality of their newly built vehicles has improved, suggesting a potentially lower future-period warranty expense, analysts do not expect investors to overlook this setback. The automaker has grappled with higher repair costs for several years intermittently, making it difficult for investors to grant Ford a reprieve.

The disappointing report had an immediate impact on Ford's share price, with shares plummeting by nearly 17% in midday trading. The sharp decline reflects investors' concerns regarding the company's profitability and ability to manage its warranty expenses effectively.

Ford will have to address these challenges in order to regain investor confidence and turn its financial performance around.