General Motors on Wednesday reported fourth-quarter earnings that easily beat Wall Street expectations, but the company warned a global semiconductor chip shortage could cut its earnings by $1.5 billion and $2 billion this year.
Automakers and parts suppliers began warning of a semiconductor shortage late last year after demand for vehicles rebounded stronger than expected following a two-month shutdown of production plants due to the coronavirus pandemic. GM has already temporarily closed car and crossover plants in Kansas, Canada, Mexico through mid-March due to the shortage. It also has cut production in South Korea.
- Adjusted EPS: $1.93, vs. $1.64 expected, based on average analysts.
- Revenue: $37.5 billion, vs. $36.12 billion expected.
In November, John Stapleton, then-GM’s interim CFO, told Wall Street analysts that GM expected its pretax adjusted earnings would be around $8.5 billion and $9 billion for the second half of the year.
The automaker reported pretax adjusted earnings of $5.3 billion, or $2.83 earnings per share, for the third quarter, while saying the fourth quarter would be weaker due to seasonality.
GM reported an adjusted pretax profit of $105 million in the fourth quarter of 2019 due to a 40-day labor strike impacting vehicle production. Revenue was $30.8 billion during that quarter.
-CNBC