GM expects strong first half of year despite production interruptions due to chip shortage


DETROIT – General Motors on Wednesday reported first-quarter results that easily beat Wall Street earnings expectations, saying it expected a strong first half of the year despite an ongoing global semiconductor chip shortage that has caused factory closures.

Here’s how GM did compared with what Wall Street expected based on average estimates compiled by Refinitiv.

Adjusted EPS: $2.25, vs. $1.04 expected based on average analysts’ estimates compiled by Refinitiv.

Revenue: $32.47 billion, vs. $32.67 billion expected.

GM reaffirmed its earnings guidance for the year. The company forecast between $10 billion and $11 billion, or $4.50 to $5.25 per share, in adjusted pretax profits and adjusted automotive free cash flow of $1 billion to $2 billion for 2021.

The forecasts factored in the potential impact of an ongoing global semiconductor chip shortage, including a hit of $1.5 billion to $2 billion to earnings and a decrease of $1.5 billion to $2.5 billion to its free cash flow.

GM reported an adjusted pretax profit of $1.3 billion, or 62 cents per share, in the first quarter of 2020 as the coronavirus began shutting down factories. Revenue was $32.7 billion during that quarter. On an unadjusted basis, net income was $294 million.

This story is developing. Please check back for updates.



READ SOURCE