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GM beats revenue estimates with pricing and demand in flux. The stock rises.




The result for the second quarter at General Motors was better than expected. The company also lifted financial guidance. The stock rose in pre-market trading on Tuesday.

GM (ticker: GM ) reported adjusted earnings per share of $1.91 and operating income of $3.2 billion in the second quarter on sales of $44.7 billion.

Wall Street was looking for earnings of $1.87 per share and operating income of $3.2 billion on sales of $42.1 billion. In the year-ago quarter, GM (ticker: GM ) reported adjusted earnings of $1.14 and operating profit of $2.3 billion on sales of $35.8 billion.

For the full year, GM expects an operating profit of between 12 and 14 billion dollars. In April, this range was 11 to 13 billion dollars.

GM shares rose 0.8% after the results were announced. S&P 500 futures rose 0.1[ads1] percent. Dow Jones Industrial Average futures traded flat.

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This is breaking news. Read a preview of GM’s earnings below and check back for more analysis soon.

There’s no shortage of questions for auto investors heading into GM’s earnings report on Tuesday.

Interest rates, supply chains, prices and demand are changing. How GM handles it will go a long way in determining how the stock performs in the second half of the year.

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For the second quarter, Wall Street is looking for earnings per share of $1.87 and operating income of $3.2 billion on sales of $42.1 billion. In the year-ago quarter, GM (ticker: GM ) reported adjusted earnings of $1.14 and operating profit of $2.3 billion on sales of $35.8 billion.

Sales and earnings are expected to improve as supply chain problems that have plagued the auto industry for years ease — including semiconductor shortages. GM delivered 691,978 units in the US in the second quarter, up from 582,401 units delivered in the second quarter of 2022.

Dealer inventory ended in the second quarter at 427,973 units, up from around 250,000 units a year ago.

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Improving inventory is a good thing, but increased supply can mean weaker pricing. While the average transaction price for a new car in the U.S. remains high, at about $49,000 according to Kelly Blue Book, incentives from automakers are also increasing, coming in at more than $2,000 per unit.

However, incentives help consumers afford new cars, which has been a challenge. Monthly car payments increase a lot, along with the interest rates. Americans buy new cars at an annual rate of about 15 million units a year today. Before the pandemic, there were close to 17 million.

Electric vehicles are another topic investors will care about. GM delivered 15,354 electric cars in the US in the second quarter, down from 20,670 delivered in the first quarter.

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Most of GM’s EV deliveries are Chevy Bolts, which are being discontinued. It increases the effort for upcoming launches. GM will ship electric versions of the Chevy Blazer and Silverado in the second half of 2023 and an electric version of the Equinox in 2024. Investors will want one or all of these to be hit products.

For the full year, GM expects operating profit for 2023 to be between $11 billion and $13 billion. That estimate was given in April and was up from a range of $10.5 billion to $12.5 billion given in January.

Wall Street is currently projecting $11.8 billion, just above the midpoint of GM’s range.

During midday trading on Monday, the GM share was up approx. 14% over the past 12 months, while the S&P 500 and Dow Jones Industrial Average rose 15% and 11%, respectively.

The management will organize a conference call on Tuesday at 8:30 a.m. Eastern Time.

Write to Al Root at allen.root@dowjones.com



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