General Motors (GM) posted softer-than-expected second quarter earnings Tuesday and said it would slow hiring and cut spending as it prepared for what could be weaker demand over the final half of the year.
General Motors said adjusted earnings for the three months ending in June came in at $1.14 per share, down 42.1% from the same period last year and firmly south of the Street consensus of $1.20 per share. Group revenues were pegged at $35.76 billion, GM said, a 4.6% increase from last year that came in just ahead of analysts' consensus of $34.52 billion tally, thanks in part to near record-high average selling prices of $50,499.00 per unit.
GM repeated its view that adjusted 2022 earnings will come in between $6.50 and $7.50 per share, or $13 billion to $15 billion, with adjusted automotive free-cash flow from operations of between $7 billion and $9 billion.
Earlier this month, GM said supply chain disruptions lead to production delays that impacted around 100,000 vehicles which were missing certain components that will delay their ultimate sale.
"We have been operating with lower volumes due to the semiconductor shortage for the past year, and we have delivered strong results despite those pressures," said CEO Mary Barra.
"There are concerns about economic conditions, to be sure," she added. "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. We have also modeled many downturn scenarios and we are prepared to take deliberate action when and if necessary."
GM shares were marked 3.1% lower in early afternoon trading following the earnings release to change hands at $33.49 each.
