GM said net income for the second quarter rose by nearly 52% to $2.6-billion, as revenue grew 25% from the year-ago period when production was hobbled by semiconductor shortages
lifted its full-year profit guidance on Tuesday, in large part because it plans to invest less in new products and cut operating costs by an additional $1-billion through the end of next year.
GM’s more bullish outlook comes after six months of stronger demand and richer pricing than expected earlier this year, Chief Financial Officer Paul Jacobson said during a media conference call.GM said it will spend $11-billion to $12-billion on capital investments this year, down from an earlier plan to spend $11-billion to $13-billion. Jacobson did not identify specific projects that would be cut.
GM’s decisions to cut new product investment and operating costs come as the automaker’s profit margins are under pressure. GM’s pretax profit rose from a year earlier to 7.2 per cent of revenue in the second quarter. But for the first six months of the year, GM’s pretax margins fell to 8.3 per cent of revenue, down from 8.9 per cent a year ago.
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