{"id":106677,"date":"2021-02-10T22:06:14","date_gmt":"2021-02-10T22:06:14","guid":{"rendered":"https:\/\/fin2me.com\/?p=106677"},"modified":"2021-02-10T22:06:14","modified_gmt":"2021-02-10T22:06:14","slug":"gm-ceo-says-chip-shortage-could-hit-profits-by-2-billion","status":"publish","type":"post","link":"https:\/\/fin2me.com\/markets\/gm-ceo-says-chip-shortage-could-hit-profits-by-2-billion\/","title":{"rendered":"GM CEO says chip shortage could hit profits by $2 billion"},"content":{"rendered":"

DETROIT (Reuters) – General Motors Co on Wednesday said the global semiconductor chip shortage could shave up to $2 billion from 2021 profit, but the U.S. automaker\u2019s highly profitable big pickups and SUVs won\u2019t suffer any production cuts.<\/p>

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After reporting a fourth-quarter profit of $2.8 billion and a 2021 profit outlook some saw as conservative, GM shares were down 4.5% in early trading.<\/p>\n

Chief Executive Mary Barra, in a media briefing, said GM \u201cwon\u2019t lose any production\u201d of its high-profit full-size pickup trucks and SUVs, although the supply of computer chips \u201cis still a bit fluid.\u201d<\/p>\n

However, she added, \u201cwe\u2019re going to be able to meet the production schedules\u201d for the year. GM officials have repeatedly stressed they will protect production of its highest profit vehicles.<\/p>\n

U.S. rival Ford Motor Co previously said it lost some production of its high-profit, top-selling F-150 pickup truck.<\/p>\n

On Tuesday, GM extended production cuts at three North American plants and said it would partially build and later finish assembling vehicles at two other factories due to the chip shortage.<\/p>\n

GM expects the shortage to trim $1.5 billion to $2 billion from its 2021 operating profit, or up to about 90 cents a share.<\/p>\n

Including that hit, it forecast a profit this year of $4.50 to $5.25 a share. Analysts had expected $5.89 according to Refinitiv data, but that did not account for the chip hit.<\/p>\n

\u201cWhile some may focus on a guidance, which is optically soft versus consensus due to semi shortage impact, we ultimately believe investors should look through it,\u201d Credit Suisse analyst Dan Levy said in a research note.<\/p>\n

The global chip shortage also will have a short-term impact on production and cash flow, GM said.<\/p>\n

Asked whether GM would invest in a chipmaker to secure supplies, Barra said the automaker is always looking at what to integrate into its operations. She added, however, that taking a stake in a semiconductor company was a longer-term solution the company would evaluate.<\/p>\n

GM said it expects to accelerate spending on electric and autonomous vehicles in 2021. Projected capital expenditures this year are $9 billion to $10 billion, including more than $7 billion for EVs and AVs.<\/p>\n

Investors and Wall Street have increasingly focused on GM\u2019s strategy to roll out electric vehicles rather than quarterly results, and the stock has responded to the company\u2019s announcements around increased and accelerated EV spending.<\/p>\n

GM earned $2.8 billion, or $1.93 a share, in the fourth quarter, compared with a loss of $194 million, or 16 cents a share, in the prior year.<\/p>\n

The company ended the year with $22.3 billion in cash and $40.5 billion in total liquidity, including untapped credit lines.<\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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