General Motors Company (NYSE: GM) reported better-than-expected revenue for its second quarter on Tuesday. Shares still slipped 3.0% as profit fell shy of estimates.
General Motors signs EV deals
General Motors is committed to producing 1.0 million electric vehicles in North America in 2025. To that end, it signed a deal with LG Chem on Tuesday for 950,000 tons of cathode material that’s sufficient for it to build roughly 5.0 million EVs.
It also entered into an agreement with Livent for LiOH (Lithium Hydroxide) – another essential component of Lithium-Ion batteries. On CNBC’s “Squawk Box”, CFO Paul Jacobson said:
We’re focusing on direct sourcing with a good component of our battery raw materials to ensure more control over supply chain for some of these items that might be challenged over the future.
General Motors Q2 financial highlights
Net income tanked 40% year-over-year to $1.692 billion
EPS of $1.14 was significantly below last year’s $1.90
On an adjusted basis, automaker earned $1.14 per share
Revenue saw an annualised growth of 3.5% to $35.75 billion
Adjusted automotive free cash flow stood at $1.407 billion
Consensus was $1.33 of adjusted EPS on $33.185 billion in revenue
General Motors full-year forecast
For the full financial year, General Motors now forecasts $6.50 to $7.50 of adjusted per-share earnings. In comparison, analysts had called for $6.89.
The legacy carmaker forecasts a negative impact of $5.0 billion from inflation this year. Still, CFO Paul Jacobson said:
Demand for our vehicles remains very strong. Despite the fact that we’ve increased production, inventory levels are staying down. There’s a lot of demand that was unmet over the last couple of years as we’ve gone through COVID and chip issues.
General Motors stock is now down 45% versus its year-to-date high.
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