Home Finance Pricey models help GM outrace first-quarter supply chain snarls

Pricey models help GM outrace first-quarter supply chain snarls

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The brand new GM brand is seen on the facade of the Basic Motors headquarters in Detroit, Michigan, U.S., March 16, 2021. REUTERS/Rebecca Cook dinner

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April 26 (Reuters) – Basic Motors Co’s (GM.N) first-quarter revenue beat analyst estimates on Tuesday, because the automaker centered on gross sales of dearer fashions with greater margins, even with manufacturing nonetheless restricted by chip shortages and provide chain disruptions.

GM’s web earnings dipped barely to $2.9 billion within the quarter, in contrast with analysts’ estimates of $2.45 billion, as greater costs weren’t sufficient to offset a rise in prices.

However Chief Govt Officer Mary Barra delivered an upbeat message to traders: “We proceed to see a powerful pricing alternative as a result of there may be demand for our product.”

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GM shares had been flat in after-hours commerce at $38.

“Whereas the outcomes exceeded expectations, and marked a much-needed optimistic information level for the inventory, we imagine the core investor query is whether or not this earnings energy could be maintained amid rising inflationary pressures,” Credit score Suisse analyst Dan Levy mentioned in a analysis word.

Barra mentioned GM expects to construct 25%-30% extra automobiles this yr than final regardless of continued volatility within the provide of semiconductor chips, which the automaker expects to ease within the second half.

GM mentioned it expects full-year web earnings of $9.6 billion to $11.2 billion, and reaffirmed its full-year outlook for adjusted EBIT of $13 billion to $15 billion.

On the identical day that rival Ford Motor Co (F.N) launched common manufacturing of its new F-150 Lightning electrical pickup, Barra mentioned GM has acquired 140,000 reservations for the brand new Chevrolet Silverado EV truck that’s nonetheless practically a yr away from manufacturing.

GM reaffirmed a aim to construct 400,000 electrical automobiles this yr and subsequent, however within the newest quarter the corporate had only a 0.3% share of the electrical automobile market in the USA.

Barra mentioned the corporate now will peg a part of its government compensation to EV efficiency targets, together with gross sales quantity and launch timing.

The automaker will start promoting the brand new Cadillac Lyriq electrical SUV later this yr in North America and China.

GM’s China fairness earnings within the quarter was $234 million, down from $308 million a yr in the past. China income dropped to $9 billion, from $9.9 billion a yr earlier.

GM’s first-quarter income of $36 billion was up 11% from $32.5 billion a yr in the past. Diluted earnings per share had been $1.35, in contrast with $2.03 a yr earlier.

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Reporting by Paul Lienert, Joe White and Ben Klayman in Detroit; Modifying by Chris Reese, Jonathan Oatis and Bernard Orr

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