General Motors Co. said today its second-quarter profit fell on supply chain disruptions caused by an ongoing shortage of semiconductors.
Detroit-based GM reported a quarterly profit of $1.69 billion, or $1.14 a share, compared with $2.84 billion, or $1.90, a year earlier.
The company in June built some vehicles, including pickups and SUVs, without some components because of the lack of semiconductors. Those vehicles are being finished in the year’s second half.
The profit decline reflected “the impacts of the supply chain disruptions we experienced, especially in June,” CEO Mary Barra said in a letter to shareholders. “We have been operating with lower volumes due to the semiconductor shortage for the past year.”
The shortage has held down GM’s vehicle production. The automaker still has strong demand for its pickups and SUVs. GM’s quarterly revenue rose to $35.8 billion from $34.2 billion during the same period last year.
Despite the profit decline, GM affirmed its full year forecast for a profit of between $9.6 billion and $11.2 billion and adjusted earnings before interest and taxes of between $13 billion and $15 billion.
“Our outlook for the second half is strong,” Barra said in the letter to shareholders. “This confidence comes from our expectation that GM global production and wholesale deliveries will be up sharply in the second half.”
At the same time, GM said it is preparing for an economic downturn.
The company is “already taking proactive steps to manage costs and cash flows, including reducing discretionary spending and limiting hiring to critical needs and positions that support growth,” the CEO said. “We have also modeled many downturn scenarios and we are prepared to take deliberate action when and if necessary.”
Russia’s war against Ukraine has hit the global economy. In the U.S., the Federal Reserve has increased interest rates in an attempt to cool inflation.
For the year’s first half, GM posted a profit of $4.6 billion, or $2.49 a share. That’s down from $5.9 billion, or $3.93 a share, for the first half of 2021. Revenue rose to $71.7 billion from $66.6 billion.
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