GM warns of manufacturing issues in second quarter but stands by 2022 forecast
- The forecast was part of a filing by the automaker disclosing that it has about 95,000 vehicles in its inventory that were manufactured without certain components as of June 30.
- GM said it expects that "substantially all of these vehicles" will be completed and sold to dealers before the end of 2022.
DETROIT – General Motors on Friday warned investors that supply chain issues would materially impact its second quarter earnings, while maintaining its previous guidance for 2022.
The Detroit automaker said it expects net income during the second quarter to be between $1.6 billion and $1.9 billion and pre-tax adjusted earnings to be in the range of $2.3 billion and $2.6 billion.
Analysts expected GM's net income to be about $2.5 billion during the second quarter, according to FactSet. GM did not previously provide a forecast for its second quarter.
Shares of the automaker were down by 2% after briefly being halted during pre-market trading, pending news.
The forecasts were part of a filing by the automaker disclosing that it has about 95,000 vehicles in its inventory that were manufactured without certain components as of June 30, a majority of which were built in June. GM said it expects that "substantially all of these vehicles" will be completed and sold to dealers before the end of 2022.
Despite the issues, GM stood by its previously announced guidance for 2022, that includes net income of between $9.6 billion and $11.2 billion, pre-tax adjusted earnings of between $13 billion and $15 billion, or $6.50 and $7.50 a share, and adjusted automotive free cash flow guidance range of between $7 billion and $9 billion.
In addition to inflation and other macroeconomic factors, the global automotive industry has been battling supply chain problems caused by the coronavirus pandemic for more than a year — specifically, supplies of semiconductor chips that are used throughout vehicles.
The filing was released ahead of GM reporting its second-quarter U.S. sales, which were down 15.4% from a year ago
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