General Motors missed Wall Street’s earnings expectations for the second quarter despite a record operating profit. It also raised its guidance for the year.The company reported Adjusted EPS as $1.97, but the analysts estimated it as—$ 2.23.
The Revenue of the company is $34.17 billion, and it beat the analysts’ expectations of $30.9 billion. General Motors’ second-quarter earnings were dragged down by some $1.3 billion in warranty recall costs, including $800 million related to the Chevrolet Bolt EV. The electric vehicle has been recalled twice in the past year due to fire risks, most recently last month.
The automaker raised its adjusted full-year guidance to between $11.5 billion and $13.5 billion, or $5.40 to $6.40 a share, up from $10 billion to $11 billion, or $4.50 to $5.25 a share. General Motors CFO Paul Jacobson described the company’s outlook to investors Wednesday as cautious.General Motors shares were down by as much as 9.8% during intraday trading Wednesday before closing at $52.72 a share, down 8.9%. It was the company’s worst daily loss by percentage since the beginning of the coronavirus pandemic in March 2020.
The automaker expects headwinds of between $3.5 billion and $4.5 billion during the second half of the year, including commodity costs rising by $1.5 billion and $2.0 billion and lower earnings from its financial arm. The company expects to produce about 100,000 fewer vehicles less in North America during the second half of the year compared to the first six months.