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General Motors Tops Q3 Earnings Forecast Amid Chip Shortage, EV Shift

General Motors topped analysts' forecasts with solid third quarter earnings and a bullish outlook as CEO Mary Barra navigates a global chip shortage and the carmaker's shift into electrified vehicles.

General Motors  (GM) - Get Free Report posted much stronger-than-expected third quarter earnings Wednesday, adding that full-year profits will likely hit the high end of its prior forecast, as the carmaker navigates a global semiconductor shortage amid its ongoing shift towards electrified vehicles. 

General Motors said adjusted earnings for the three months ending in September came in at $1.52 per share, down 46.3% from the same period last year but firmly ahead of the Street consensus of 96 cents per share.   Group revenues were pegged at $26.8billion, GM said, a 24.5% decrease from last year that came in just ahead of analysts' consensus of $26.65 billion tally. 

Looking into the final months of the year, General Motors repeated that it sees adjusted earnings for 2021 in the region of $5.70 to $6.70 per share, or $11.5 billion to $13.5 billion, with CEO Mary Barra adding "full-year results will approach the high end of our guidance." 

"I am very proud of the team that has delivered these results and committed so strongly to our growth strategy. This includes our dealers and suppliers, who are critical to our success," said Barra. "Together, we are developing new technologies, incubating new businesses, delivering great products and services for our customers, and generating strong results that we can reinvest in our future."

"Our team is energized by our bold vision, building momentum despite the challenges we’ve faced," she added. "I have never been more confident or more excited about the opportunities ahead."

General Motors shares closed 5.4% lower Wednesday at $54.26 following the earnings release.

Earlier this month, GM said plans to boost electric vehicle sales, expand its autonomous driving platform 'Cruise' and continue to produce combustion engine cars could collectively lift annual revenues to around $280 billion by 2030.

Expanded margins, which GM said will rise to between 12% and 14% by 2030, would likely mean pre-tax profits of around $39 billion as a result. CFO Paul Jacobson noted that the carmaker could commit as much as $10 billion in annual capital spending while still having enough to return cash to shareholders.

While not abandoning the idea of producing combustion engine cars, GM's clear shift towards a reliance on EV and platform sales growth dovetails with one of the carmaker's newest investors: activist hedge fund Engine No. 1.

The San Francisco-based hedge fund, which successfully pushed for board changes at Exxon Mobil  (XOM) - Get Free Report earlier this year, has said it's a supporter of its planned transition to electrified vehicle production, with founder Chris James telling CNBC earlier this week that it merits a higher market valuation for the Detroit-based carmaker.

"GM, with the support of a strong management team, a great board, has decided they are going to embrace the future," he said. "They themselves can go in and disrupt and industry and be successful during this transition."