(Reuters) -General Motors Co on Wednesday swung to a second-quarter profit from a loss last year when the COVID-19 pandemic shut operations, and raised its full-year forecast despite an $800 million hit from the recall of the Chevrolet Bolt electric vehicle.
Net income was $2.8 billion, or $1.90 a share, compared with a loss in the year-earlier quarter of $806 million, or 56 cents a share.
GM said adjusted earnings before interest and taxes were a record $4.1 billion, and $8.5 billion in the first half. It boosted full-year EBIT-adjusted guidance to $11.5 billion-$13.5 billion, from the previous $10 billion-$11 billion.
The company expects to lose production of about 100,000 vehicles in North America in the second half, and anticipates commodity costs rising by $1.5 billion-$2.0 billion.
"The semiconductor shortage remains fluid and supply chain challenges continue" in the second half, GM said in its earnings material.
The largest of the Detroit automakers benefited from strong demand and the high prices it was able to charge for its popular trucks and sport utilities, which offset costs related to the Bolt recalls and production disruptions caused by shortages of semiconductors.
Like its rivals, GM also faces uncertainty because of the rapid spread of the Delta variant of the coronavirus. GM, Ford Motor Co and Stellantis NV, along with the United Auto Workers, on Tuesday reinstated mandatory mask wearing in their U.S. factories, and called on workers to get vaccinated.
GM's inventories of unsold vehicles as of June 30 were half the year ago levels. It said it had $1.4 billion worth of vehicles in inventory that had been built without certain electronics modules because of the lack of semiconductors.
GM said its more bullish full-year outlook depended on having no vehicles stuck in inventory because of a lack of semiconductors.
(Reporting by Paul Lienert and Ben Klayman in Detroit, Editing by Louise Heavens and Nick Zieminski)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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