GM shrugs off chip shortage to reiterate full-year guidance

General Motors reiterated its full-year guidance on Wednesday, despite the global semiconductor shortage, after strong first-quarter performances in its core markets.

Revenues in the three months to March end came in at $32.5bn, compared to $32.7bn a year previously, while net income was $3.0bn, up from $294m. The figures last year where affected by the start of the pandemic, which shut factories and showrooms around the world.

Adjusted earnings before interest and tax rose to $4.4bn from $1.2bn, while diluted adjusted earnings per share were $2.25. Analysts had been expecting EPS of $1.05.

The US car giant said first-quarter earnings had been driven by a strong price and mix performance in North America and a recovery in China.

It continued: “The company is highly confident in its full-year 2021 guidance as it works to manage through the semiconductor shortage, which is impacting automakers globally. The company expects to be at the higher-end of the adjusted EBIT range.”

Full-year adjusted EBIT is forecast to come in between $10.0bn and $11.0bn, with full-year diluted earnings per share predicted to be between $4.28 and $5.03.

Net income is expected to range from $6.8bn to $7.6bn.

The update boosted the firm's shares, and by 1400 GMT, GM had put on 4% in pre-market trading.

Chief executive Mary Barra said: “These strong results demonstrate once again the underlying strength of our business, especially in North America and China, and at GM Financial.

“The speed and agility of our team are front and centre as we move from managing through a pandemic to managing the global semiconductor shortage. 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.”

A world-wide shortage of chips has steadily worsened over the last year. Initially caused by temporary delays at the start of the pandemic, production has since returned to normal but demand has surged. Covid-19 has caused a boom in home technology, while car makers are designing increasingly tech-focused vehicles.