GM’s record second quarter operating profit slowed by headwinds
General Motors (NYSE: GM) had already struggled to follow up Ford Engines (NYSE: F), and Tesla Inc (NASDAQ: TSLA) which topped estimates with their earnings reports last week. It is also weathering a global semiconductor chip shortage, after confirming the closure of three full-size pickup truck assembly plants in North America next week. On Wednesday, it missed Wall Street’s expectations for its second quarter despite reporting a record operating profit. However, he raised the forecast for 2021 and confirmed the arrival of two electric vehicles.
Global semiconductor shortage remains complex
In addition to causing the plant to shut down, this crisis is expected to reduce industry profits by billions this year. Next week, Flint, Michigan; Fort Wayne, Indiana; and Silao, Mexico will be inactive again, just a week after the resumption of production which had been suspended for the same reason, only further showing the uncertain dynamics of the supply shortage. During the forced break, unfinished vehicles will be completed and shipped to dealers in affected factories.
Revenues exceeded the expected $ 30.9 billion as they amounted to $ 34.17 billion. On the flip side, Adjusted EPS of $ 1.97 is lower than the expected $ 2.23, as it was depleted by warranty recall costs of around $ 1.3 billion, of which $ 800 million. caused by the Chevrolet Bolt EV recall due to fire hazards, the second time this year. .
On an unadjusted basis, net profit was $ 2.8 billion compared to the loss of $ 758 million in the quarter last year due to the pandemic that caused its factories to shut down. Adjusted second-quarter profit before tax was $ 4.1 billion, a second-quarter record, beating GM’s adjusted profit before interest and taxes by $ 3.9 billion, or 1.86 $ per share, in 2016.
The electric pickup arrives
GM CEO Mary Barra has confirmed the arrival of two new electric vehicles in GM’s business lineup, without disclosing the timeline or other details. GM will create a full-size battery electric van for Chevrolet as well as a medium truck for service and utility vehicles such as school buses. They will be powered by GM Ultium cells and Hydrotec fuel cells. These two electric vehicles are part of GM’s plan to increase its investment in electric and autonomous vehicles by 30% to $ 35 billion by 2025.
Startups such as Amazon-supported (NASDAQ: AMZN)) Rivian along with legacy automakers such as Ford Motor and electric vehicle pioneer Tesla Inc will have their electric pickups on the market by then.
Next year we also expect a luxury electric pickup from Hercules Electric Vehicles and a tech-savvy model from Atlis Motor Vehicles, both of which will be equipped with the TerraVis solar fusion, intellectual property of Worksport Ltd. (NASDAQ: WKSP) (NASDAQ: WKSPW) just received approval to be listed on NASDAQ, a well-established company that contributes cutting-edge renewable solar energy research to the array of electric vehicles and a record of more of $ 20,000,000 million in cash and cash equivalents, free of long-term debt, it is now where it belongs to other revolutionary tech companies that give us hope for a greener future.
The legendary automaker has raised its previous adjusted annual forecast from $ 10 billion to $ 11 billion to a new range of $ 11.5 billion to $ 13.5 billion. He also expects commodity costs to rise by $ 1.5 billion and $ 2.0 billion, as well as lower revenues from his financial arm, as he continues to see the impact of the chip shortage this year and in 2022.
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