Stocks of General Motors slightly advanced in Wednesday’s late trading session as it raised its 2021 earnings guidance.
Accordingly, the New York-listed shares of the American automotive manufacturer increased 0.90% or 0.52 points to $58.58 per share.
In the regular hours market, GM also improved 0.33% to 0.19 points to $58.06 per share.
General Motors adjusted its full-year outlook on solid pricing, resilient consumer demand, and a stronger-than-expected supply of semiconductor chips.
Correspondingly, it increased its 2021 revenue forecast to $14.00 billion from the previous figure of between $11.50 billion and $13.50 billion.
The initial guidance for this year is between $10.00 billion and $11.00 billion. This data attempted to account for the impact of the ongoing global semiconductor chip crunch.
The parts scarcity led the car manufacturers, including General Motors, to sporadically halt production this year for weeks.
Nevertheless, it contributed profits on record financing and vehicle pricing due to the low inventories.
At the same time, the company cited the continued strength in the consumer orders as a tailwind.
Consequently, this latest announcement will likely please investors and Wall Street analysts
Last October, they were disappointed that the company only noted to guide its Q4 performance to the high end of its range.
Subsequently, shares of the automaker plummeted by 5.40% after the automaker posted its third-quarter results.
Eventually, its crosstown rival Ford Motor partially widened its guidance that same day.
Meanwhile, the company declined to disclose its earnings expectations for 2022. The business ensured that they anticipated another strong year for the automaker.
Then, General Motors mentioned that they also closely monitor the possible impacts of the Omicron coronavirus variant.
General Motors Forms New Joint Venture
Moreover, General Motors also plans to form a new joint venture with the South Korean chemical firm Pocso.
Accordingly, the agreement aimed to produce the critical materials needed for electric vehicles batteries.
Remarkably, this is a significant move for GM to control its supply chain and reduce the chances of disruptions in the future.
In addition, the companies plan to establish a new facility in North America in 2024.
General Motors explained that the plant would process critical battery materials known as cathode active material (CAM) for its EV.
Currently, automakers exert their efforts to integrate onshore supply chains for EV batteries to lessen costs and reduce the risks of supply chain disruptions.
Furthermore, General Motors has a market capitalization of $84.30 billion and shares outstanding of $1.45 billion.