General Motors Just Reported Earnings. Everything Will Be Ok.

General Motors Just Reported Earnings. Everything Will Be Ok.

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As



General Motors



goes, so goes the U.S. economy. And GM, which reported earnings Wednesday morning, is doing just fine, despite a chip shortage that is roiling the U.S. economy.

GM is an old company that investors have only just rediscovered. It’s the quintessential value stock, and value stocks are outperforming growth stocks by about 10 percentage points in 2021. GM, up 33%, has done even better.

Like many businesses, GM sales are booming in the post-Covid economic recovery. Dealers can’t keep cars on the lots, which is pushing up prices. What’s more, parts shortages are constraining production, exacerbating the supply issue.

GM didn’t let that bother it during the first quarter. The company reported $2.25 in adjusted per-share earnings, more than double analyst projections for $1.08 a share. Management didn’t raise guidance despite the blowout numbers, however. It still expects an operating profit of $5.5 billion during the first half of the year, despite reporting a profit