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GM raised its earnings and cash flow guidance for 2023, for a second time this year, after reporting on Tuesday strong second-quarter profits beating analyst expectations on the back of strong demand for many of its models.
GM’s revenue of $44.7 billion for the second quarter exceeded analyst estimates of $42.6 billon, and net income jumped to $2.6 billion from $1.666 billion for the second quarter of 2022.
Profits would have been even higher were it not for a $792-million charge for new commercial agreements GM has with LG Electronics and LG Energy Solution.
“The charge reflects the conscious decision GM made during the Chevrolet Bolt EV and Bolt EUV recall to serve customers in ways that go beyond traditional remedies, and GM is taking new steps that will reduce its costs and improve EV margins over time,” GM said.
Customer demand drove growth in sales as the U.S. premium trucks segment grew from a niche to a centerpiece, the automaker said.
“The biggest driving force behind our financial results is customer demand for our vehicles,” Mary Barra, GM Chair and CEO, wrote in a letter to shareholders.
“We have earned four consecutive quarters of higher retail market share in the U.S. versus a year ago with continued strong pricing and incentive discipline,” Barra added.
In the electric vehicle market, GM met its target to produce 50,000 EVs in North America in the first half of the year.
“With both cell and vehicle production increasing, we continue to target production of roughly 100,000 EVs in the second half of this year and we’ll grow from there,” Barra said.
Following the higher Q2 figures, GM now raised its net profit guidance by $1 billion, to $9.3 billion-$10.7 billion for full-year 2023. The guidance for the adjusted automotive free cash flow was hiked to $7.0 billion-$9.0 billion, compared to the previous outlook of $5.5 billion-$7.5 billion.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com