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 CEO Mary Barra said while the company will have production downtime in the second quarter, it expects “to have a strong first half,” with pretax-adjusted of about $5.5 billion.
“The speed and agility of our team are front and center as we move from managing through a pandemic to managing the global semiconductor shortage,” she said in a letter to shareholders. “This remains a challenging period for the company as we emerge from 2020, but the team continues to demonstrate its ability to manage complex situations.”
Shares of GM were up more than 3% during premarket trading.
At the end of the first quarter, GM CFO Paul Jacobson told investors he was “increasingly confident” that the automaker would achieve its earnings targets for the year despite the chip shortage.
On an unadjusted basis, net income was $3 billion for the first quarter compared with $294 million a year earlier as automakers began shuttering factories to help control early outbreaks in the pandemic. The automaker reported pretax adjusted earnings of $4.4 billion for the first quarter, up from $1.3 billion a year earlier.
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