On Tuesday, General Motors reported sales and profits for the second quarter that were better than Wall Street had anticipated. The company also increased its yearly profit prediction for the second time this year, thanks to strong pricing and demand for gas-powered vehicles.
Nonetheless, the stock price of the corporation fell by over 6%.
According to analysts, there are several possible causes for the selloff. These include changes in the company’s strategy for self-driving vehicles, such as Cruise, ongoing losses in China, and a general worry that the car industry will loosen up on inventory management and buyer incentives.
According to Wedbush Securities analyst Dan Ives, “We believe this is just a knee-jerk reaction and the GM quarter was a robust one, which should drive the stock higher over the coming weeks and months.”
Due to a slower-than-expected shift to electric vehicles, the Michigan carmaker is relying significantly on its gasoline-engine options to drive profitability.
Executives at GM claim the business has set the stage to achieve its lofty EV ramp-up goals.
As a company, “we’re encouraged by the early results we’re seeing in EVs now that we can build at scale,” CFO Paul Jacobson told reporters on a Monday conference call.
Production of motor vehicles reached a nine-year high in June, according to data released last week by the Federal Reserve.
U.S. vehicle manufacturing company General Motors raised its adjusted pre-tax profit forecast for the year from $12.5–14.5 billion to $13–15 billion.
According to LSEG statistics, the company’s adjusted earnings per share were $3.06, which was more than Wall Street’s consensus forecast of $2.75. The automaker reported $48 billion in sales for the three months that ended in June, which was higher than the $45.5 billion analysts had predicted.
General Motors executives also updated the public on the status of its Cruise self-driving unit, stating that the company will divert its research resources from the planned future Origin vehicle—which would lack a steering wheel and other human controls—towards a next-generation Chevrolet Bolt.
By 2024’s end, GM stock had beaten both its competitors and the S&P 500. As of Monday, the company’s stock had risen 38% year-to-date, while that of its rival Ford Motor (F.N.) had risen 18% and that of Jeep maker Stellantis had fallen 11%.
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