The shares of General Motors are down by over 8% today after the company missed earnings expectations in the second quarter of 2021.
General Motors Miss Earnings Expectations
Car manufacturer General Motors reported its second-quarter earnings earlier today, and it didn’t perform as analysts had expected. The shares of the company dipped following this announcement despite General Motors raising guidance for the year.
The adjusted earnings per share is $1.97 vs. $2.23 expected. However, General Motor’s revenue surpassed analysts’ expectations. The company generated $34.17 billion in the second quarter of the year compared to the $30.9 billion estimated by analysts.
The second-quarter earnings were negatively affected by the $1.3 billion warranty recall costs, including the $800 million General Motors spent on o the Chevrolet Bolt EV. The electric car has so far been recalled twice over the past year due to fire risks, with the most recent happening last month.
General Motors also raised its adjusted full-year guidance. It currently stands between $11.5 billion and $13.5 billion, or $5.40 to $6.40 per share. The adjusted full-year guidance is up from the previous $10 billion to $11 billion, or $4.50 to $5.25 a share.
GM’s Shares Down By 8%
The Shares of General Motors are down by over 8% since the company reported its Q2 earnings. At the time of this writing, GM is trading at $53.01 per share. Year-to-date, GM’s shares are up by over 20%. It started in 2021 trading at $41 per share, but it is now trading at $53.
The automaker expects to manufacture roughly 100,000 fewer vehicles in North America in the second half of 2021 compared to H1. General Motor’s financials have improved in recent months. The unadjusted net income was $2.8 billion for Q2 compared with a loss of $758 million in the same period last year. Furthermore, General Motors reported adjusted pretax earnings of $4.1 billion for Q2, up from a loss of $536 million a year earlier.