General Motors Posts Record Q4 Earnings

General Motors Posts Record Q4 Earnings

General Motors (NYSE: GM) reported record earnings for 2021, despite the devastating computer chip shortage that impacted the industry. It now expects to produce an operating profit this year between USD13 Billion and USD15 Billion as the semiconductor shortage begins to improve.

“With an improving outlook for semiconductors in the U.S. and China, we expect our 2022 results will remain strong,” CEO Mary Barra wrote in a letter to shareholders, highlighting that earnings will be “at or near record levels.”

The Detroit automaker reported earnings of USD1.35 per share, compared to the expected USD1.19 a share. Revenue amounted to USD33.58 Billion, lower than analysts anticipated USD34.01 Billion.

Furthermore, the company is shifting towards selling all-electric vehicles by 2025 and revealed that it would be investing USD35 Billion to develop EVs and self-driving vehicles. In the letter to shareholders, Barra hinted that the investment will eventually be multiplied.

“Now, backed by consistently strong financial results, including record EBIT-adjusted of $14.3 billion in 2021 and the overwhelmingly positive customer response to other Ultium vehicles we have shown so far, like the Chevrolet Silverado EV, the Cadillac Lyriq, and the Chevrolet Equinox EV, we are accelerating our plan,” Barra wrote.

Barra said that the company would not be reinstating its dividend, which it established at the beginning of the coronavirus pandemic in April of 2020. She stated that PayPal is set to use the acquired capital to accelerate its USD35 Billion, in order to invest in electric and autonomous vehicles throughout 2025.

“As we move forward, we will consider all opportunities to return excess capital to shareholders, but we will not reinstate a dividend at this time,” Barra told analysts during a call Tuesday. “Our clear priority is to accelerate our EV plan and drive growth.”

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