GM easily beats profit forecasts despite chip shortage

General Motors released First-quarter profits Wednesday that far exceeded analysts’ forecasts… as GM focused on its highly profitable line of pick-up trucks and SUVs…

and found ways to steer around the global chip shortage hitting the manufacturing world.

GM's strategy during the chip shortage: curtail production on less-profitable models and concentrate the limited chip supply on producing hot sellers like the Suburban and the Tahoe, which come with higher price tags and bigger profits.

Despite Wednesday’s big earnings beat, GM is cautious about the future. GM didn’t raise its full-year outlook and repeated an earlier forecast that the chip shortage could shave up to $2 billion off profits this year.

Other automakers have sounded the alarm as well. Stellantis, created from the merger of PSA and Fiat Chrysler, warned Wednesday the disruption could last into 2022.

And Ford recently warned the chip shortage could force it to slash production in half this quarter, costing it about $2.5 billion in lost production.

The chips are vital to today's high-tech autos and are used in everything from computer management of engines to driver assistance systems.

The Commerce Department plans a meeting with automakers next week on the chip shortage issue, officials briefed on the matter told Reuters.

GM CEO Mary Barra told investors Wednesday the shortage will get worse during the current quarter but will likely ease during the second-half of the year.