GM profit shrugs off chip shortage with high-priced pickups, SUVs

General Motors Co on Wednesday posted better-than-expected first-quarter profit despite a global semiconductor chip shortage as it held down costs and focused on high-margin pickup trucks and SUVs, and said it expected full-year pre-tax profit to come in at the high end of its forecast.

"The speed and agility of our team are front and center as we move from managing through a pandemic to managing the global semiconductor shortage," Chief Executive Mary Barra said in a letter to shareholders. "This remains a challenging period for the company as we emerge from 2020."

Barra added that the No. 1 US automaker's "supply chain and manufacturing teams are maximizing production of high-demand and capacity-constrained vehicles."

In a conference call with reporters, Barra said that the chip shortage will worsen in the second quarter before starting to improve in the second half of the year.

GM reiterated its full-year 2021 earnings guidance and said "based on what we know today," its results will be at the upper end of the $10 billion to $11 billion adjusted pre-tax profit it has previously forecast.

The company stuck to earlier forecasts that the chip shortage could shave $1.5 billion to $2 billion from this year's profits.

Carmakers across the world have had to curb output, hampering their attempts to recover from the COVID-19 pandemic, due to a shortage of vital chips used in everything from computer management of engines to driver assistance systems.

Stellantis on Wednesday said it expects the shortage to take a bigger bite out of second-quarter production and warned the disruption could last into 2022.

Ford Motor Co said last week it expects second-quarter vehicle output to be halved by the shortage.

During the shortage, GM has prioritized its highest profit vehicles, including the Chevrolet Silverado and GMC pickups.

Thanks to high consumer demand that has pushed up prices, focusing on those high-margin models contributed $3.2 billion to GM's first-quarter pre-tax profit.

GM posted a first-quarter net profit of $3 billion, or $2.03 per share, up from $294 million or 17 cents per share a year earlier. Excluding items, the company earned $2.25 per share, well above analyst expectations of $1.04 per share.

Revenue in the quarter dipped slightly to $32.5 billion from $32.7 billion. Analysts had expected revenue to be flat at $32.7 billion.