General Motors has reported a higher than expected fourth-quarter profit on strong demand for trucks and SUVs during the Covid-19 pandemic but forecast weaker than expected 2021 results citing a shortage of chips used in car production.
The car maker expects a chip shortage to trim $1.5 billion to $2 billion from its 2021 operating profit.
It forecast a range of $10 billion to $11 billion, or $4.50 to $5.25 a share. Analysts had expected $5.89, according to Refinitiv data.
The global chip shortage also will have a short-term impact on production and cash flow, the company said.
GM's chief executive Mary Barra said GM "won't lose any production" of its high-profit full-size pickup trucks and SUVs, although the supply of computer chips "is still a bit fluid."
However, she added, "we're going to be able to meet the production schedules" for the year.
GM said it expects to accelerate spending on electric and autonomous vehicles in 2021. Projected capital expenditures this year are $9-$10 billion, including more than $7 billion for EVs and AVs.
The company trimmed its outlook for adjusted free cash flow to $1 billion to $2 billion.
GM said it earned $2.8 billion, or $1.93 a share, compared with a loss of $194 million, or 16 cents a share, in the previous year.
For the full year, GM said it earned $6.4 billion, down from $6.7 billion in 2019.
GM said its 2020 operating margin was 7.9%, including 9.4% in North America.
The company said it ended the year with $22.3 billion in cash and $40.5 billion in total liquidity, including untapped credit lines.
