DETROIT (AP) — Citing an improved supply of automotive computer chips, General Motors raised its financial guidance on Wednesday and said it expects to return to a normal production rate by the end of next year.
Chief Financial Officer Paul Jacobson told investors on a virtual chat with Credit Suisse that the company has seen improvement in the fourth quarter on costs and sales volume as demand for its vehicles remains strong.
Nearly all automakers, including GM, have been hit by a global semiconductor shortage, which began late last year when chipmakers shifted production to consumer electronics after auto plants were closed due to the pandemic. When the auto plants came back, chip makers didn't shift production back to auto chips, which unlike chips for computers and games, have to withstand extreme temperatures and rattling on the roads.
Jacobson said GM now sees pretax earnings for this year of around $14 billion, up from previous guidance of $11.5 billion to $13 billion. Net income for the year is expected to be around $10 billion, GM said in a regulatory filing.
"We've experienced a little bit of favorability on cost, and volumes (sales to dealers) are trending higher primarily on chip availability," Jacobson said.
Jacobson said he expects the first three months of next year to be similar to this year's fourth quarter, with improvement in the second half of 2022. He said there are "winds of caution" with the omicron variant of the coronavirus now appearing in the...
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