A General Motors sign is seen during an event on January 25, 2022 in Lansing, Michigan. – General Motors will create 4,000 new jobs and retain 1,000, as well as significantly increase battery and electric truck manufacturing capacity.
Jeff Kowalski | AFP | Getty Images
DETROIT. Amid rising costs and supply chain volatility, General Motors reaffirmed its earnings expectations for 2022, despite reporting lower net income and margins year-over-year.
Here’s how GM did compared to Wall Street’s expectations:
- Adjusted earnings per share: $2.09 vs. $1.68, according to Refinitiv Consensus.
- Income: Refinitiv’s consensus forecast is $35.98 billion vs. $37.01 billion.
GM reaffirmed its pre-tax adjusted earnings forecast of $13 billion to $15 billion for the year, while lowering net income expectations to $9.4 billion to $10.8 billion from $9.6 billion to $11.2 billion. Profit margin in the first quarter was 8.2% compared to 9.3% a year earlier.
Unadjusted, first-quarter net income was $2.9 billion, up from $3 billion a year earlier. The automaker reported adjusted pre-tax earnings of $4 billion for the first quarter, up from $4.4 billion a year earlier.
GM is one of the first major automakers to publish first quarter results. Investors are keeping a close eye on the report as it reveals the current production and supply chain issues in the automotive industry.
In addition to inflation and other macroeconomic factors, the global automotive industry has been struggling with supply chain problems caused by the coronavirus pandemic for more than a year, in particular with the supply of critical semiconductor chips that are used in all cars.
The ongoing war in Ukraine, as well as the recent closure of factories in China due to Covid-19 outbreaks, have further exacerbated supply chain problems in the industry.
Investors are also looking forward to any progress or updates to GM’s plans for autonomous and electric vehicles, including a planned $35 billion technology investment through 2025. GM doesn’t typically break down such spending on a quarterly basis, although rival Ford Motor has promised to start doing so next year.
GM shares are down about 34% in 2022. Its market cap is around $55 billion, up from over $90 billion at the start of the year.
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