GM sticks to full-year profit forecast, but prepares for possible slowdown
CEO Mary Barra said company is preparing for possible slowdown
DETROIT - General Motors Co on Tuesday posted a quarterly profit and reaffirmed its forecast for the year, but added it was preparing for a potential slowdown.
The Detroit automaker reported second-quarter net income of $1.7 billion, or $1.14 a share, down from $2.8 billion, or $1.90 a share, in the year-earlier quarter. Analysts had expected $1.20 a share according to Refinitiv data.
GM reaffirmed that it expects full-year net income of $9.6 billion to $11.2 billion, and adjusted EBIT of $13 billion to $15 billion, but Chief Executive Mary Barra said the company is preparing for a possible slowdown.
"There are concerns about economic conditions, to be sure," she said in a shareholder letter.
"That's why we are already taking proactive steps to manage costs and cash flows, including reducing discretionary spending and limiting hiring to critical needs and positions that support growth," Barra added. "We have also modeled many downturn scenarios and we are prepared to take deliberate action when and if necessary."
She cited the company's strong earnings and cash flow, and investment-grade credit rating. She added that GM will drive down costs to help it deliver $90 billion in annual revenue by 2030.
GM also said Tuesday that it had binding agreements securing all the electric vehicle battery raw materials needed to support its plan for annual capacity of 1 million vehicles in North America in 2025. Read full story
(Reporting by Ben Klayman and Paul Lienert in Detroit, Editing by Louise Heavens)