GM Goes Profit, Raises Full-Year Outlook
Aug. 4 (Reuters) – General Motors Co (GM.N) posted second-quarter profit on Wednesday after losing last year when the COVID-19 pandemic shut down, and raised its forecast for the year despite an $ 800 million hit from the Chevrolet Bolt electric vehicle recall.
Net income was $ 2.8 billion, or $ 1.90 per share, compared with a loss of $ 806 million the year before, or 56 cents per share.
GM said adjusted earnings before interest and taxes were a record $ 4.1 billion and $ 8.5 billion in the first half. He raised the adjusted forecast for full-year EBIT to $ 11.5 billion to $ 13.5 billion, from $ 10 billion to $ 11 billion previously.
The company expects to lose production of about 100,000 vehicles in North America in the second half of the year and expects commodity costs to increase from $ 1.5 billion to $ 2.0 billion.
“The semiconductor shortage remains fluid and supply chain challenges continue” into the second half of the year, GM said in its results.
Detroit’s largest automaker has benefited from strong demand and the high prices it was able to charge for its popular trucks and SUVs, which offset costs associated with Bolt recalls and production disruptions caused by semiconductor shortages.
Managing Director Mary Barra, in an earnings call Wednesday, said GM’s US stocks were “pretty thin”, with a 25-day supply. “I anticipate it will be pretty tight for the rest of the year and will continue until the next one.”
Like its rivals, GM faces uncertainty due to the rapid spread of the Delta variant of the coronavirus. GM, Ford Motor Co (FN) and Stellantis NV (STLA.MI), as well as United Auto Workers, on Tuesday reinstated the compulsory wearing of masks in their American factories and called on workers to be vaccinated. Read more
GM’s inventory of unsold vehicles as of June 30 was half its levels a year ago. It said it has $ 1.4 billion in inventory of vehicles built without certain electronic modules due to the lack of semiconductors.
GM said its more optimistic outlook for the full year depended on no vehicles stuck in inventory due to a lack of semiconductors.
The company reiterated its plan to introduce more than 30 electric vehicles by 2025, including two new electric vehicles for commercial customers and small businesses.
GM said its previously announced investment of $ 35 billion between 2020 and 2025 is primarily aimed at increasing manufacturing capacity for electric vehicles and batteries. The company said it would increase production capacity for electric vehicles by converting existing combustion engine vehicle assembly plants.
Reporting by Paul Lienert and Ben Klayman in Detroit, editing by Louise Heavens and Nick Zieminski
Our Standards: The Thomson Reuters Trust Principles.