General Motors’ revenue climbs by 22% in the fiscal fourth quarter
- General Motors’ revenue climbs by 22% in the fiscal fourth quarter.
- The U.S. automaker warns of a £1.45 billion hit to earnings this year.
- GM increases spending in autonomous and all-electric vehicles.
General Motors Company (NYSE: GM) said on Wednesday that its financial performance was better than expected in the fiscal fourth quarter despite a resurgence in COVID-19 cases in recent months.
General Motors shares were reported about 0.5% down in premarket trading on Wednesday. The stock is now trading at a per-share price of £40.66. In comparison, it had slid to as low as £12.15 per share in March 2020 when the ongoing Coronavirus pandemic pushed its factories into temporarily shutting down and halting production.
GM’s Q4 financial results versus analysts’ estimates
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General Motors said that its net income in the quarter that concluded in December came in at £2.06 billion. Its Q4 pre-tax profit printed at £2.68 billion that translates to £1.40 per share. GM valued its revenue in the recent quarter at £27.12 billion that represents a 22% year over year increase.
According to Refinitiv, experts had forecast the company to post £26.11 billion of revenue in the fourth quarter. Their estimate for adjusted per-share earnings stood at a lower £1.19. GM had also topped analysts’ estimates for profit and sales in the prior quarter (Q3).
For fiscal 2021, General Motors now forecasts up to £7.95 billion of pre-tax income or up to £3.80 per share. The American multinational warned on Wednesday that a global shortage of semiconductor chips is likely to slash its earnings by £1.45 billion this year.
GM increases spending in autonomous and all-electric vehicles
General Motors said on Wednesday that it is likely to spend up to £7.23 billion in 2021 to expand its footprint in autonomous and all-electric vehicles. The figure also accounts for deferred spending due to the ongoing COVID-19 crisis from last year. As per CEO Mary Barra:
“We are investing in the business. We see tremendous growth opportunities, and we’re also accelerating EVs; $7 billion alone of the $9 to $10 billion is focused on EV/AV. So, we see tremendous opportunity there.”
In related news from the U.S. auto industry, rival Ford Motor said last week that it will boost its investment in electric and autonomous vehicles to £20.96 billion through 2025.
GM performed fairly upbeat in the stock market last year with an annual gain of more than 15%. At the time of writing, the Detroit-based car manufacturer has a market cap of £58 billion and a price to earnings ratio of 25.14.