DETROIT: General Motors Co on Wednesday reported stronger-than-expected results for the third quarter, despite a drop in revenue and profit, and said full-year earnings would be at the high end of its previous forecast.
GM said adjusted earnings per share in the quarter dropped to $1.52, from $2.83 a year earlier, citing the global semiconductor shortage. Analysts had expected 96 cents a share.
Revenue dropped to $26.8 billion, from $35.5 billion in the year-ago quarter, while profit fell to $2.4 billion, from $4.0 billion a year earlier.
Adjusted earnings before interest and taxes dropped to $2.9 billion from $5.3 billion, while net margin dipped to 9.0% from 11.4%.
GM shares were down 1.4% in premarket trade.
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In a letter to shareholders, Chief Executive Mary Barra said, "We now believe GM's full-year results will approach the high end of our guidance, which is for EBIT-adjusted in the range of $11.5 billion to $13.5 billion."
GM said third quarter results dropped mainly because of lower wholesale shipments to dealers due to the continuing shortage of chips and increased commodity and logistics costs.
The company said the negative impact was partially offset by strong pricing on full-size pickups and SUVs and an agreement by supplier LG Electronics to cover most of the anticipated $2 billion in costs related to the recall of the Bolt EV and Bolt EUV.
Adjusted automotive free cash flow was a negative $4.4 billion, compared with a positive $9.9 billion a year earlier. GM said the drop reflected the impact of work-in-process inventory of vehicles produced but missing some semiconductors.
"We expect to clear the majority of our work-in-process inventory but anticipate some inventory will remain at year end." the company said.
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