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
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.
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Wajeeh Khan
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