DETROIT: Amid posting a lower net profit and margin than a year earlier, General Motors (GM) confirmed its profitability estimates for 2022, despite growing costs and supply chain instability.

Here’s how General Motors fared against Wall Street’s expectations

Adjusted EPS: $2.09 vs $1.68, as per Refinitiv consensus estimates

Revenue: $35.98 billion vs $37.01 billion, as per Refinitiv consensus estimates

GM raised its net income forecasts from $9.4 billion to $10.8 billion to $9.6 billion to $11.2 billion, reaffirming its pretax adjusted earnings prediction of between $13 billion and $15 billion for the year. Its profit margin in the first quarter was 8.2 percent, down from 9.3 percent a year ago.

GM also raised its full-year adjusted profits per share guidance to $6.50 to $7.50 per share, up from $6.25 to $7.25 per share before. The firm increased its ownership position in its Cruise autonomous car unit and included the operation’s losses in its consolidated income tax return, resulting in the adjustment.

Unadjusted net income for the first quarter was $2.9 billion, down from $3 billion a year earlier. For the first quarter, the automaker posted pretax adjusted earnings of $4 billion, down from $4.4 billion a year ago.

GM is one of the first big automakers to announce its first-quarter earnings. The report is being eagerly watched by investors as an indicator of the auto industry’s continued production and supply chain issues.

In addition to inflation and other macroeconomic challenges, the global automobile sector has been dealing with supply chain issues caused by the coronavirus epidemic for more than a year, particularly with shortages of critical semiconductor chips used in vehicles.

Despite the issues, General Motors has stated that it aims to produce 25% to 30% more vehicles this year than last year.

While GM, which essentially abandoned Europe several years ago, has not been hit as hard as other automakers by the conflict in Ukraine, it has been grappling with recent manufacturing closures in China due to Covid-19 breakouts.

Because the government has designated vehicle manufacturing as an important operation during lockdowns, GM CEO Mary Barra said the company is “cautiously optimistic” about its production in China.

Investors are especially interested in hearing about any progress or updates on GM’s ambitions for autonomous and electrified vehicles, which include a $35 billion investment anticipated through 2025. GM normally does not break out such expenditures on a quarterly basis, while rival Ford Motor has committed to start doing so next year.

Since introducing a new electric version of its Chevrolet Silverado pickup in January, GM said it had received approximately 140,000 reservations. Next year, the vehicle is slated to hit the market.

So far in 2022, General Motors stock has lost almost 34% of its value. Its market capitalization is now under $55 billion, down from over $90 billion at the start of the year.

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