GM Undershoots Estimates on Chip Dearth, Lifts Full-Year Outlook

(Bloomberg) — General Motors Co. missed analysts’ profit estimates for the latest quarter but raised its full-year guidance as rich margins on pickups vied with nagging production cuts at its North American factories from a global semiconductor shortage.

Soaring new-vehicle prices on high-margin pickups couldn’t make up for supply chain issues in the second quarter and expenses related to battery fires on its Chevrolet Bolt electric vehicle. But GM remained optimistic about its full-year earnings prospects, boosting its 2021 forecast Wednesday after signaling in June it would hit the high-end of its previous guidance.

The Detroit automaker now expects adjusted earnings before interest and taxes of $11.5 billion to $13 billion for all of 2021, which translates to adjusted earnings of $5.40 to $6.40 per share. That compares to an earlier projection for $10 billion to $11 billion, or $4.50 to $5.25 a share.

Shares of GM fell 2.9% in premarket trading to $56.20 as of 7:45 a.m. in New York. The stock had gained 39% this year as of the close Tuesday.

Chip Shortfall

Record average transaction prices for new vehicles pumped up profits, even as GM and other automakers struggled to keep plants open due to shortfalls in chip supplies. The company’s average new vehicle transaction price in July rose 9% from a year earlier — almost double the industry average of 4.8% — to an estimated $44,749, according to market researcher TrueCar.

But it hasn’t been able to make the most of that uptick in pricing due to limited vehicle inventories. GM disclosed on Tuesday that output of its Chevrolet Silverado and GMC Sierra full-size pickups — which it sold a combined 237,000 of last quarter — would be affected by another round of temporary factory closures in Michigan and Mexico through Aug. 16.

The automaker reported adjusted earnings per share of $1.97 for the second quarter, below the $2.08 a share analyst consensus forecast compiled by Bloomberg. That compares to a 50 cents a share adjusted loss a year ago while in the grips of the pandemic and the 13 cents a share archrival Ford Motor Co. posted last week for the latest quarter.

GM said it spent $800 million on a recall issued late last month for almost 69,000 Chevy Bolts due to the risk of fires from defective batteries made by South Korea’s LG Chem Ltd.

More stories like this are available on

©2021 Bloomberg L.P.

Follow us on social media for the latest updates in B2B!

Twitter – @MarketScale
Facebook –
LinkedIn –

Follow us on social media for the latest updates in B2B!


POV cameras
Marshall Electronics Responds to Esports’ Massive Growth with Cutting-Edge POV Cameras
June 3, 2023

As we head into the middle of this decade, the eSports industry is witnessing an unprecedented boom. Valued at $1.42 billion in 2022, it’s projected to skyrocket to $4.47 billion by 2030, thanks to the rising adoption of smart devices and POV cameras, internet connectivity, and strategic partnerships like that of Microsoft and NVIDIA​. […]

Read More
legacy payment companies blockchain solutions partnerships
Legacy Payment Companies Embrace Blockchain Solutions. Their Infrastructure is Still “Fundamentally Not Aligned” with Web3 Payments.
June 2, 2023

Legacy payment companies are finally embracing blockchain solutions at scale, though still behind compared to the innovation that young fintech companies are bringing to the next generation of payment solutions. Regardless, this embrace is taking many shapes, and it’s still not a guarantee that they’re up to the task. In the last year, Visa […]

Read More
legal counsel
The Importance of Legal Counsel to Major League Organizations
June 2, 2023

Live sporting events continue to be at the forefront of entertainment in America year after year. Between enthused fans, good food and drinks, and anticipation for record-breaking moments, the ambiance of a stadium on a game day is unmatched. However, behind the scenes of our beloved stadiums and sports traditions lies term sheets and contracts […]

Read More