GM CEO Mary Barra speaks to the media prior to the start of General Motors Company’s 2017 annual meeting of shareholders Tuesday, June 6, 2017, at GM’s global headquarters in Detroit, Michigan.
Photo by John F. Martin for GM
General Motors reported second-quarter earnings that fell short of Wall Street estimates after the company was unable to ship nearly 100,000 vehicles at the end of the quarter due to parts shortages.
But the company maintained its previous full-year earnings guidance, saying it is confident it can ramp up production in the second half of 2022. It also confirmed it has locked in enough supplies of critical battery-related materials to give support its plans to build 1 million electric vehicles a year in North America starting in 2025.
Here are the key numbers, compared to Wall Street consensus expectations compiled by Refinitiv.
- Adjusted earnings per share: $1.14, compared to expectations of $1.20 and $1.97 in Q2 2021.
- Revenue: $35.76 billion, compared with $33.58 billion expected and $34.17 billion in Q2 2021.
- Adjusted EBIT: $2.34 billion, compared to $4.12 billion in Q2 2021.
- Adjusted EBIT margin: 8.0%, compared to 11.2% in Q1 2022 and 10.4% in Q2 2021.
CEO Mary Barra said in a statement that GM has “binding agreements” securing all the battery-related raw materials it will need to build 1 million electric vehicles annually in North America by 2025, including “new agreements multi-year” announced today with Livent Corp. for lithium and with long-time GM battery partner LG Chem for cathode material.
Like other global automakers, GM has been dealing with supply chain disruptions in recent quarters as outbreaks of Covid-19, and more recently the Russian invasion of Ukraine, have forced factory shutdowns and have wreaked havoc on logistics around the world.
GM warned investors on July 1 that it had about 95,000 vehicles with missing components in its inventory. GM, like most automakers, records revenue when a finished vehicle is shipped to dealers, not before.
“We’ve been operating at lower volumes due to the semiconductor shortage over the past year, and we’ve delivered good results despite those pressures,” Barra said. “There are concerns about economic conditions, of course. That’s why we’re already taking proactive steps to manage costs and cash flow, including reducing discretionary spending and limiting hiring to critical needs and positions that give growth support.
“We have also modeled many recession scenarios and are prepared to take deliberate action when and if necessary,” Barra said.
Barra said GM remains confident it will meet its previous guidance for the full year. The company expects net income of between $9.6 billion and $11.2 billion by 2022.
“This confidence stems from our expectation that GM’s overall production and wholesale deliveries will increase sharply in the second half,” he said.
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