Carmakers exceed expectations for Q2 profit in the US

As anticipated, the first few days in August have second-quarter financial reports rolling in from carmakers. In large part, Q2 2021 has been one of the best on record with profits exceeding the forecasts set earlier in the year as the chip shortage was factored in. GM, Stellantis, Toyota, Hyundai, Mazda, and others are into the black – a position many feared wouldn’t be possible earlier in the year.

General Motors posts $2.8 billion net income

Pivoting to high-demand and high-profit vehicles proved to be a good strategy for General Motors in Q2 2021. The company brought in revenue of $34.2 billion US, more than doubling Q2 profit 2020 results. And where last year’s second quarter reaped a loss of $0.8 billion net income. Operating cash flow amounted to $4.0 billion whereas it was a deficit of $8.0 billion last year over the same period. All said and done, the net income was posted at $2.8 billion.

In a statement to shareholders, Mary Barra said, “The credit for our strong first half goes to our employees and extended team, including suppliers and dealers, who have collectively demonstrated strength, agility, and resilience.

There will be challenges, but we now expect full-year EBIT-adjusted in the range of $11.5 billion to $13.5 billion, compared with $10 billion to $11 billion previously.”

Ford reports $1.1 billion EBIT earnings in Q2

The chip shortage took a bite out of the Blue Oval in Q2, but not nearly to the extent possible. The Dearborn, MI carmaker reported an adjusted Q2 earnings before interest and taxes (EBIT) of $1.1 billion. Comparatively, the second quarter last year produced a $1.9 billion loss EBIT.

Net income rang up as $561 million for Ford with revenue increasing to $26.8 billion in the quarter, up from $19.4 billion in Q2 2020.

Ford CEO Jim Farley praised his team for the results. “Despite the many headwinds from the semiconductor shortage, some of which were unique to Ford, our team skillfully managed our business and we generated a positive EBIT, and I can tell you that this outcome was far from certain at the beginning of the quarter. It required intense focus from our team on cost, pricing, and mix.”

Toyota has best-ever quarterly results

For Toyota, the quarter ending June 30 represents the first quarter in their 2022 fiscal year. By all accounts, it’s the best quarter the company has ever achieved globally. Quarterly operating profit is reported at $9.15 billion US (997.4 billion yen) plus other streams of revenue, with a net income coming in at an astounding $8.2 billion.

Toyota is warning that the last half of 2021 is likely not going to be as profitable due to lagging inventory, following the same trend as virtually all other carmakers.

Profits reported by most carmakers, but temper expectations in H2

Other carmakers including Hyundai, Honda, Stellantis, and Mazda have released Q2 data as well, largely surpassing expectations for investors and management alike for the period. But they warn that the second half of the year could produce dramatically different results based on the current crisis in manufacturing, revolving around the chip shortage.

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