The auto industry been hit hard by the global shortage of semiconductors, a result of surges in demand for personal computers and consumer electronics during the COVID-19 pandemic. 

But General Motors (GM -2.31%) has been hit less hard than many of its rivals -- and it underscored that on Thursday morning when it said it will boost output at two truck plants and beat its first-half profit guidance. 

About the production gains

GM said it will increase production of (very profitable) heavy-duty pickups at its Flint, Michigan, plant by about 1,000 trucks a month. It will also boost output of midsize pickups from its factory in Wentzville, Missouri, completing an additional 30,000 of the trucks by July 10. 

While GM credited the production increase in Flint to "production-line efficiencies," the added midsize pickups are a direct result of GM's ability to secure extra supplies of key chips. GM had been building pickups without the chips and holding them at the plant; those trucks will be completed, tested, and shipped over the next several weeks. 

Taken together, those extra trucks will probably deliver between $1.5 billion and $2 billion in additional revenue for GM in the second quarter. 

GM said that smaller numbers of vehicles that had been held at other plants awaiting chips will be completed and delivered in June and July. The company also said that the U.S. plants that make its most urgently needed products will skip the traditional summer-vacation downtime this year, working through the breaks to help restore dealers' depleted inventories. 

A worker tends to a partially-assembled heavy-duty GM pickup on the assembly line at GM's Flint, Michigan plant.

GM will increase production of high-profit pickups at two U.S. plants after securing additional computer chips, a move that will help it beat its first-half profit guidance, it said on Thursday. Image source: General Motors.

Why GM expects to beat its first-half guidance

GM said that as a result of its efforts to prioritize the production of higher-profit vehicles amid the chip shortage, its engineering teams' efforts to make best use of the chips it had available, and "the pull-ahead of some projected semiconductor deliveries" that will now happen before the end of June, it expects its first-half results to be "significantly better" than its earlier guidance.

GM said in May that it expected to deliver a "strong" first half, with adjusted earnings before interest and tax ("EBIT-adjusted," in GM-speak) of around $5.5 billion. For the full year, GM said at the time it expected EBIT-adjusted between $10 billion and $11 billion, with adjusted earnings per share between $4.50 and $5.25. ("Adjusted" figures exclude one-time charges and credits.) 

What it means for investors

Those EBIT-adjusted figures are actually pretty good in historical context. But GM said they reflected $1.5 billion to $2 billion in net negative impact from the chip shortage. Many auto investors (including this writer) expected the brunt of that impact to hit in the second quarter: Given that GM generated $4.4 billion in EBIT-adjusted in the first quarter and told us to expect $5.5 billion of EBIT-adjusted in the first half, the conclusion -- that the second quarter was going to be kind of ugly -- seemed obvious.

GM is now saying that maybe it won't be nearly as ugly as we thought. Although supplies of the company's most profitable trucks and SUVs have been tight, demand has been strong and incentives have been minimal -- meaning that as it did in the first quarter, GM is getting good margins on the vehicles it is able to deliver and sell. 

And now, it looks like it might be able to deliver more of those profitable vehicles than it (and we) expected, while key competitors are still scrambling to secure enough chips. 

Long story short, the next few quarters are looking good for GM investors.