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GM revenue and sales plummet as chip shortage continues to plague automakers

bynewsdesk
October 27, 2021

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GM also gave investors a bullish outlook, saying full-year earnings should be at the higher end of the raised guideline it presented on investor day early this month.

Overall, it said its adjusted net income, excluding special items, was $2.2 billion, down from $4.1 billion a year earlier. But that was nearly $1 billion better than analysts polled by Refinitiv had predicted.

Sales fell nearly 25% to $26.8 billion, despite record high car prices due to the limited supply of cars for sale. The number of cars sold by GM worldwide fell by 27%. Sales in the US fell even more, a third less than a year earlier.
Supply chain problems have hit the auto industry hard for months, limiting production by causing temporary plant closures. According to Cox Automotive, overall US auto sales fell about 13% in the quarter.

“The quarter was challenging due to continued pressure on semiconductors, but it also includes very strong results,” CEO Mary Barra said in a letter to investors. “We now believe GM’s full-year results will approach the highest point of our expectations.”

GM to halt production at most plants in North America
One thing that helped the results was a $1.9 billion settlement with LG to cover the costs of an expensive recall of its North American electric car, the Chevrolet Bolt, which is at risk of fire from the battery destroyed by LG was created. Since the company had already paid for some of the recall costs in the second quarter and was willing to take on an additional charge related to the recall in the third quarter, the settlement with LG yielded a net profit of $700 million. in the period.

But those gains were previously disclosed by GM and factored into analyst estimates, so the company’s better-than-expected results weren’t due to that.

Despite disappointing earnings and the strong outlook, GM (GM) stocks were lower in premarket trading,

Sources

1/ https://Google.com/

2/ https://www.cnn.com/2021/10/27/investing/gm-earnings/index.html

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