New York, United States – General Motors reported a jump in second-quarter profits Tuesday as it lifted its full-year projections, citing strong consumer demand that has allowed for solid pricing.
The big US automaker reported profits of $2.6 billion, up 52 percent from the year-ago level. Revenues were $44.7 billion, up 25 percent.
GM scored higher deliveries compared with the year-ago period in both North America and China.
In the spring, market watchers had spoken of a potential cooling in the US vehicle market due to persistently elevated inflation. But Wall Street analysts have recently pointed to the strong US labor market as a reason car sales have stayed robust.
“The biggest driving force behind our financial results is customer demand for our vehicles,” said Chief Executive Mary Barra in a letter to investors.
Barra described plans to trim capital spending by “focusing on the most strategic internal combustion engine and EV programs and our highest impact growth initiatives.”
Tuesday’s results, however, were dented by $792 million in costs connected to a recall of the Chevrolet Bolt due to battery problems.
GM is now covering that amount of a previous $1.9 billion hit that LG Electronics and LG Energy Solution had assumed.
GM increased full-year projections, raising its range of annual net income to $9.3-$10.7 billion from $8.4-$9.9 billion.
The outlook assumes GM negotiates a new labor agreement without a work stoppage.
Leaders of the United Auto Workers have signaled they plan to adopt a hard line in the talks, raising the possibility of a strike after the current contract expires in September.
Barra pointed to GM’s “long history of negotiating fair contracts,” adding that “our goal this time will be no different.”
Shares of GM rose 0.5 percent to $39.49 in pre-market trading.