GM optimistic on full year results despite impact of chip shortage By Reuters

© Reuters. FILE PHOTO: The new GM logo is seen on the facade of General Motors’ corporate headquarters in Detroit, Michigan, U.S. March 16, 2021. Photo taken March 16, 2021. REUTERS / Rebecca Cook / File Photo

By Ben Klayman and Paul Lienert

DETROIT (Reuters) – General Motors Co (NYSE 🙂 on Wednesday reported better than expected third quarter results despite lower revenues and profits, and said annual profits would be at their previous forecast. .

GM said adjusted earnings per share in the quarter fell to $ 1.52 from $ 2.83 a year earlier, citing the global semiconductor shortage. Analysts were expecting 96 cents a share.

Revenue fell to $ 26.8 billion from $ 35.5 billion in the last year quarter, while profit fell to $ 2.4 billion from $ 4.0 billion. dollars a year earlier.

Adjusted profit before interest and taxes fell to $ 2.9 billion from $ 5.3 billion, while net margin fell to 9.0% from 11.4%.

GM shares fell 1.4% in pre-market trading.

In a letter to shareholders, Managing Director Mary Barra said, “We now believe GM’s annual results will approach the high of our guidance, which is for adjusted EBIT of $ 11.5 billion to $ 13.5 billion. “

GM said third-quarter results fell mainly due to lower wholesale shipments to dealers amid continued chip shortages and rising commodity and logistics costs.

The company said the negative impact was partially offset by high prices on large pickup trucks and SUVs and an agreement from supplier LG Electronics to cover most of the expected $ 2 billion in recall costs. Bolt EV and Bolt EUV.

Auto adjusted free cash flow was $ 4.4 billion, up from $ 9.9 billion a year earlier. GM said the drop reflected the impact of work-in-progress inventories of vehicles produced but lacking certain semiconductors.

“We plan to eliminate the majority of our work-in-progress inventory, but we expect some inventory will remain at the end of the year.” the company said.

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