GM confirms profit forecast despite 'challenging' environment

GM confirms profit forecast despite 'challenging' environment

Shares of General Motors rose after it confirmed its profit forecast in spite of inflation concerns
Shares of General Motors rose after it confirmed its profit forecast in spite of inflation concerns. Photo: MARIO TAMA / GETTY IMAGES NORTH AMERICA/Getty Images via AFP/File
Source: AFP

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General Motors confirmed its full-year financial forecast Tuesday, lifting shares as it reported strong consumer demand in spite of a "challenging" environment with grinding inflation.

The big US automaker scored a 37 percent jump in third-quarter profits to $3.3 billion, bolstered by strong vehicle pricing in a market with historically low auto inventories.

Revenues jumped 56 percent to $41.9 billion, a quarterly record.

GM Chief Financial Officer Paul Jacobson acknowledged rising worries about the drag from inflation on economic growth, but said the company was still seeing robust demand for its products.

"We haven't seen any direct impact on our products. Pricing remains strong, demand remains strong for our product," Jacobson said on a conference call with reporters.

"I think we can't ignore what others are saying out there and what others are seeing out there," he said. "But we continue to see that strong demand so the best we can do is be prepared for it."

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GM benefited from increased auto deliveries worldwide, including in North America where it shipped around 75 percent of the partially-built autos from the prior quarter that had been suspended due to shortages of key materials.

Like other automakers, GM's operations have been constrained by limits on components, especially semiconductors.

The Detroit-based company pointed to "improvements" in the supply chain and semiconductor availability, but said it still faced "commodity and logistic challenges," according to its earnings presentation.

The results translated into higher-than-expected profits per share, but revenues slightly lagged analyst expectations.

Shares jumped 4.9 percent to $37.47 in pre-market trading.

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Source: AFP

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