Last month, General Motors (GM -0.91%) reported stellar earnings results for the first quarter of 2021. At the same time, GM warned that the industrywide semiconductor shortage would lead to dramatically worse results in the second quarter.

Smart investors knew to take that guidance with a grain of salt. After all, GM has made a habit of providing very conservative forecasts in recent years. Sure enough, the company revealed last week that it is poised to outperform its guidance for the first half of 2021 by a wide margin.

Earnings and guidance diverge

General Motors' business fired on all cylinders in the first quarter. In North America, the auto giant posted a 12.1% operating margin, as the company prioritized building high-margin vehicles and capitalized on low industrywide inventory levels by cutting back on discounts. It also logged a solid profit of around $300 million in China, its other major market. Finally, GM Financial continued its run of record profitability, contributing a $1.2 billion pre-tax profit.

As a result, GM achieved an impressive adjusted operating margin of 13.6% last quarter. That allowed it to deliver an adjusted operating profit of $4.4 billion, a record for the first quarter. (In recent years, GM has averaged first-quarter operating profits of a little less than $3 billion.)

A red Chevy Colorado midsize pickup truck.

Image source: General Motors.

After posting these excellent results, GM maintained its full-year guidance but estimated that its adjusted operating profit for the first half of 2021 would total $5.5 billion. That implied a 75% sequential drop in adjusted operating profit, to just $1.1 billion this quarter, which likely represents the peak of disruption from the semiconductor shortage.

The General revises its outlook

During the company's first-quarter earnings call, General Motors executives described plans to blunt the impact of the semiconductor shortage by (among other things) making engineering changes to use chips with greater availability. Those efforts -- along with GM's other supply-chain initiatives -- appear to be working beautifully.

On Thursday, GM told investors that it will increase shipments of its most popular models in the weeks ahead, particularly pickup trucks. It noted that its engineering efforts had successfully mitigated the impact of the chip shortage, and that it had also managed to pull forward some semiconductor deliveries to the second quarter. Additionally, the automaker plans to ramp up full-size truck production starting in the second half of 2021, as the semiconductor shortage eases.

As a result, GM said that it "now expects its first-half financial results to be significantly better than the first-half guidance previously provided [and] is optimistic about the full year." The company plans to provide more specifics about its outlook on its second-quarter earnings call in early August.

Great things in store

Considering GM's track record of routinely beating its forecasts, this "surprise" guidance increase probably shouldn't have surprised many investors. Nevertheless, GM stock climbed more than 6% on Thursday, reaching a new all-time high:

GM share-price chart from 2011 through 2021.

GM stock performance, data by YCharts.

Even after this rally, GM stock trades for less than 10 times forward earnings. That's a bargain price. Indeed, General Motors offers investors an attractive combination of near-term earnings upside (as supply constraints ease and GM rebuilds dealer inventories to meet pent-up demand) and long-term growth potential (thanks to its proactive investments in electric and autonomous vehicles).

As long as General Motors continues posting impressive earnings results while investing aggressively in its future, investors should enjoy the ride.