DETROIT (Reuters) – General Motors Co on Wednesday reported a higher-than-expected fourth-quarter profit on strong demand for trucks and SUVs during the COVID-19 pandemic but forecast weaker-than-expected 2021 results citing a shortage of chips used in car production.
GM shares were down 0.3% to $55.89 in premarket trading.
The automaker expects a chip shortage to trim $1.5 billion to $2.0 billion from its 2021 operating profit. It forecast a range of $10.0 billion to $11.0 billion, or $4.50 to $5.25 a share. Analysts had expected $5.89, according to Refinitiv data.
The global chip shortage also will have a short-term impact on production and cash flow, the company said.
Chief Executive Mary Barra, in a Tuesday morning media briefing, said GM “won’t lose any production” of its high-profit full-size pickup trucks and SUVs, although the supply of computer chips “is still a bit fluid.”
However, she added, “we’re going to be able to meet the production schedules” for the year.
GM said it expects to accelerate spending on electric and autonomous vehicles in 2021. Projected capital expenditures this year are $9.0 billion to $10.0 billion, including more than $7.0 billion for EVs and AVs.
The company trimmed its outlook for adjusted free cash flow to $1.0 billion to $2.0 billion.
GM said it earned $2.8 billion, or $1.93 a share, compared with a loss of $194 million, or 16 cents a share, in the prior year.
For the full year, GM earned $6.4 billion, down from $6.7 billion in 2019.
GM said its 2020 operating margin was 7.9 percent, including 9.4 percent in North America.
The company ended the year with $22.3 billion in cash and $40.5 billion in total liquidity, including untapped credit lines.
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