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General Motors says its supply chain issues are improving. This allowed the company to post earnings above expectations despite lower revenue forecasts.
The largest U.S. automaker said by the end of June it had been able to eliminate about 75% of inventory from the roughly 90,000 vehicles it had been unable to complete due to missing parts. .
“We are delivering on our commitments and confirming our full year guidance despite a challenging environment as demand continues to be strong for GM products,” said GM CEO Mary Barra.
Its profit for the quarter was $2.25 per share, up 48% from a year earlier and well above the $1.88 per share forecast by analysts polled by Refinitiv. But revenues, although up 52% to a record $41.9 billion, was just below the forecast of $42.2 billion.
GM said its North American plants operated at 103% capacity throughout the quarter, a dramatic improvement from a year earlier, when they could only operate at 60% capacity in due to chip shortages and other supply chain issues that caused widespread spread. temporary plant closures.
“The chips seem to be improving a bit,” chief financial officer Paul Jacobson said on a media call. “There are still misfires from time to time.” He said the ability to clean up many vehicles that were nearing completion but missing parts was a sign of the improving environment.
Barra also agreed that the flea situation was improving, but warned during a CNBC interview that “I wouldn’t say we’re completely out of it yet.” It’s more volatile than I expected at this point.
The company’s global car and truck deliveries rebounded to 1.5 million, up 17% from a year earlier, 8% above second-quarter deliveries. But for the first nine months of the year, deliveries are still 9% lower than the same period of 2021.
We are increasingly concerned about the economy falls into recessionboth in the United States and worldwide, which usually results in lower auto sales. But Jacobson said the company sees no signs of a drop in demand that could accompany an economic slowdown.
“We really don’t see anything in the short term,” he said. He said inventories were a bit higher, but that was no surprise given the accelerating pace of production.
“We are certainly aware of the headwinds there,” he said. “We cannot ignore what others say and see there. We continue to see strong demand. The best we can do is prepare for it. He said the company is not planning any layoffs at this time, as announced at Ford and You’re here.
Barra said during his interview with CNBC that the tighter inventories will allow the company to adjust faster than in previous recessions in the event of an economic downturn.
The company also saw a rebound in China, where it reported a $100 million loss from its joint ventures with Chinese automakers in the second quarter in the face of lockdowns due to surge in Covid cases the. It grossed $300 million in that country, matching the results of the previous year.
GM stock
(GM) rose 3% in premarket trading on strong full-year earnings and earnings forecasts of $6.50 and $7.50 per share, giving it a good chance to beat forecasts of 6 $.78 per share.