GM expects second quarter sales hit, keeps outlook intact

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GM expects second quarter sales hit, keeps outlook intact

General Motors Co. expects second quarter sales and profits to take a hit due to supply-chain problems, but the automaker said it can make up for delayed production later this year and reaffirmed its full-year guidance.

As of June 30 GM had 95,000 vehicles in inventory -- most of them built in June -- that can't be sold until certain semiconductors arrive to finish assembly, according to a Friday securities filing. The carmaker expects to finish building those vehicles by the end of the year, which will keep its full-year guidance intact.

Carmakers are wrestling with availability for certain chips because of the reduced semiconductor shortage. The shortfall has forced GM and others to cut production at times or start vehicles without chips and finish them when supplies arrive.

GM said second-quarter sales fell 15% due to production and supply issues. As big a drop as that is, it is a sign of an improvement when compared to the second half of last year when supply chain problems caused a sales shortfall of more than 40%.

The company said the market share would have gone up 1 percentage point in the quarter to 16.3%. GM will likely take the lead in US sales from Toyota Motor Corp. researcher Cox Automotive said this week.

The Detroit-based GM said that the second quarter profit will come in between $1.6 billion and $1.9 billion, and the average analyst estimates is $2.4 billion.

GM is sticking to its expectations of net income between $9.6 billion and $11.2 billion in the year 2022, adjusted operating profit of $13 billion to $15 billion and adjusted earnings of $5.76 to $6.76 a share, despite the hit to quarterly sales.

The shares were temporarily halted in pre-market trading before the news was released. The shares rose by as much as 3.5% at the New York open.