GM reports higher profits, sees limited hit from chip shortage

NEW YORK: Strong demand for large autos in the United States boosted General Motors' fourth-quarter profits as the big automaker projected Wednesday higher 2021 operating earnings despite a global semiconductor supply shortage.

GM reported fourth-quarter profits of $2.8 billion, compared with a loss of $194 million in the year-ago period.

Revenues rose 21.7 percent to $37.5 billion.

The results capped a rollercoaster year for GM and other US automakers, which were forced to shut down plants in the spring due to the coronavirus.

The company suffered a big loss in the second quarter, but then enjoyed strong results in the second half of 2020 amid strong demand and tight vehicle inventories that helped bring in high prices.

The auto giant said the semiconductor shortage would reduce operating profits by between $1.5 billion and $2 billion in 2021, but the full-year forecast is still above the level in 2020.

GM on Tuesday extended a shutdown of three plants at least through mid-March due to the shortage.

The chip shortage will not affect GM's longterm plans to invest heavily in electric cars and autonomous driving, the company said.

It projected 2021 operating profits of between $10 to $11 billion, compared with $9.7 billion in 2020.

GM said its adjusted profit per share would fall in a range of between $4.50 and $5.25 per share, below the $5.89 projected by analysts.

Shares were down 0.1 percent at $55.98 in pre-market trading.