GM surges as resilient consumers drive strong earnings

General Motors Co. (GM) stock soared on Tuesday after the automaker reported quarterly earnings that topped analysts’ expectations, fueled by a “remarkably” resilient consumer demand. The company’s strong results underscore the ongoing strength of the U.S. economy and the continued popularity of electric vehicles.

GM’s second-quarter net income surged to $2.4 billion, or $1.51 per share, from $1.8 billion, or $1.18 per share, a year earlier. Adjusted earnings per share came in at $2.07, exceeding analysts’ consensus estimate of $1.80.

The company’s revenue rose to $44.7 billion from $40.1 billion a year ago, driven by higher sales volumes and pricing. GM’s North American operations were particularly strong, with adjusted earnings before interest and taxes (EBIT) margin reaching 15.4%, up from 14.8% in the previous quarter.

“Our second-quarter results demonstrate the strength of our business and the resilience of the consumer,” said Mary Barra, GM’s chief executive officer. “We continue to see strong demand for our vehicles, including our growing electric vehicle portfolio.”

GM’s electric vehicle sales have been gaining momentum, with the company’s Cadillac Lyriq and Chevrolet Blazer EV models proving popular with consumers. The automaker has also announced plans to invest significantly in electric vehicle production and battery technology.

In addition to its strong financial performance, GM also announced that it is raising its full-year earnings guidance. The company now expects adjusted earnings per share to be between $10.50 and $11.50, up from its previous forecast of $9.50 to $11.00.

GM’s shares surged more than 5% on the news, outperforming the broader market. The strong results suggest that the automaker is well-positioned to capitalize on the growing demand for electric vehicles and to continue delivering strong returns to its shareholders.

The resilience of the U.S. consumer has been a key factor in GM’s success. Despite rising interest rates and inflationary pressures, consumers have continued to spend on automobiles. This trend is likely to support GM’s sales and earnings in the coming quarters.

However, there are also risks to consider. The global economy is facing a number of challenges, including the ongoing war in Ukraine, supply chain disruptions, and the threat of a recession. If these risks materialize, they could have a negative impact on GM’s business.

Overall, GM’s second-quarter earnings report was a positive sign for the company and the broader economy. The automaker’s strong financial performance and its focus on electric vehicles suggest that it is well-positioned for long-term growth.