GM 3Q profit falls 40% to $2.4B as chip shortage dings sales

FILE- In this May 2, 2021, file photo, a General Motors sign hangs on the side of a Chevrolet showroom in Englewood, Colo. General Motors announced Tuesday, Oct. 26 2021, that it is planning to install up to 40,000 electric vehicle chargers, starting next year, across the U.S. and Canada as part of a new community charging program. (AP Photo/David Zalubowski, File)

This Jan. 27, 2020 photo shows the General Motors logo. High prices for trucks and SUVs helped General Motors post a $2.4 billion third-quarter profit despite factory closures due to a shortage of computer chips and other parts. But the profit was 40% lower than the $4 billion GM made during the same period last year as sales slumped last quarter and the company lost market share in the U.S., its most profitable country. (AP Photo/Paul Sancya)

DETROIT (AP) — High prices for trucks and SUVs helped General Motors post a $2.4 billion third-quarter profit, but the income was 40% lower than a year ago due to short supplies of new vehicles because of a global computer chip shortage.

GM's earnings fell from $4 billion last year as sales slumped and the company lost market share in the U.S., its most profitable country.

Revenue for the quarter fell 25% to $26.78 billion.

Crosstown rival Ford is due to post its quarterly results later Wednesday after the close of trading on Wall Street.

GM CEO Mary Barra, meanwhile, said on a conference call with analysts that she is “pretty confident” that GM's San Francisco-based Cruise autonomous vehicle subsidiary would be carrying passengers without human safety drivers sometime next year. To do that, Cruise still needs a final permit from California regulators.

Barra also told reporters Wednesday that the global shortage of semiconductors, plus COVID outbreaks at supplier factories, hit the company during the third quarter. “It still continues to be somewhat volatile,” she said.

However, GM is seeing improvement in the current quarter and expects additional supplies in the first three months of 2022.

GM has said it expects to produce about 200,000 fewer vehicles in the second half of this year compared with the first half, with most of the impact occurring from July through September.

Barra said she's spoken with the CEOs of most major chip makers, and the companies are working on strategies to make sure the shortages don't happen again. “I think we'll definitely see changes to ensure we have the right supply,” she said.

GM's profit came even though U.S. third-quarter sales were almost 33% lower than a year ago. The company lost 3.8 percentage points of U.S. market share, according to the Edmunds.com website.

But Barra said she expects GM's market share to bounce back when factories get back to normal production. “We are selling everything we can. I wish we had more vehicles,” she said.

Consumer willingness to pay high prices for scarce new vehicles kept the money flowing for GM. The average sale price paid for a GM vehicle topped $50,000 for the quarter, up more than 16% from a year ago, Edmunds said. Barra said that once supplies grow, she expects the high prices to ease.

With the expected improvement in chip supplies, GM increased its full-year net income guidance to a range of $8.1 billion to $9.6 billion. In the second quarter it had forecast $7.7 billion to $9.2 billion for the year.

Shares of GM fell 4% to $55.11 in Wednesday afternoon trading. Ford fell 1.8% to $15.67.