General Motors Q2 earnings: ‘market can’t ignore fundamentals too long’

General Motors Company (NYSE: GM) is in the red this morning even though it reported a strong second quarter.

CFO Jacobson reacts to the earnings print

The price action is all the more interesting considering the automaker raised its guidance for the full year as well. GM now forecasts its operating profit to fall in the range of $12 billion to $14 billion this year.

In comparison, analysts were at $11.8 billion. On “Bloomberg Surveillance”, CFO Paul Jacobson said today:

We’ve just got to continue to consistently perform. I’m a big believer that the market can’t ignore fundamentals too long. I think the market will come around.

On Tuesday, General Motors also revealed plans of trimming its fixed costs by another $1.0 billion. The car manufacturer will not spend as much as expected on capital projects either, as per the press release.

Year-to-date, the automotive stock is up 10% at writing.

General Motors Q2 financial highlights

• Net income printed at $2.56 billion versus the year-ago $1.69 billion
• Per-share earnings also climbed significantly from $1.14 to $1.83
• Adjusted EPS came in at $1.91 as per the earnings press release
• Revenue went up 25% on a year-over-year basis to $44.74 billion
• FactSet consensus was $1.86 a share on $42.13 billion in revenue

Earlier this month, GM said its electric vehicle sales were down sequentially in the second quarter as Invezz reported here. Still, the Finance Chief noted:

It’s not just about producing and selling more vehicles. It’s about making sure we’re maintaining and expanding margins. Our biggest challenge is we can’t get them [vehicles] fast enough to customers.

Wall Street currently has a consensus “overweight” rating on GM shares.