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GM upbeat on full-year earnings despite quarterly profit drop

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ReutersStock Markets16 minutes ago (Oct 27, 2021 08:06AM ET)

© Reuters. FILE PHOTO: The new GM logo is seen on the facade of the General Motors headquarters in Detroit, Michigan, U.S., March 16, 2021. Picture taken March 16, 2021. REUTERS/Rebecca Cook/File Photo

DETROIT (Reuters) -General Motors Co on Wednesday reported stronger-than-expected results for the third quarter, despite a drop in revenue and profit, and said full-year earnings would be at the high end of its previous forecast.

GM said adjusted earnings per share in the quarter dropped to $1.52, from $2.83 a year earlier, citing the global semiconductor shortage. Analysts had expected 96 cents a share.

In a letter to shareholders, Chief Executive Mary Barra said, “We now believe GM’s full-year results will approach the high end of our guidance, which is for EBIT-adjusted in the range of $11.5 billion to $13.5 billion.”

GM said third quarter results dropped mainly because of lower wholesale shipments to dealers due to the continuing shortage of chips and increased commodity and logistics costs.

The company said the negative impact was partially offset by strong pricing on full-size pickups and SUVs and an agreement by supplier LG Electronics to cover most of the anticipated $2 billion in costs related to the recall of Bolt EV and Bolt EUV.

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