Economy

GM promises to cut high inventory as profit beats expectations

GM promises to cut high inventory as profit beats expectations”

General Motors Company (NYSE:GM) early Tuesday posted mixed second quarter earnings results and reaffirmed its full-year outlook, despite a downturn in revenues and weakening sales growth momentum in China.

Analysts are concerned over GM's inventory of unsold vehicles, which the automaker has built up ahead of downtime while it prepares to launch new vehicles. The company delivered 725,000 total vehicle in the U.S.in the second quarter, with a 24% jump in crossover SUV sales leading the way.

GM said it still expected to earn between $6 and $6.50 per share in 2017. It expects to complete the $2.2 billion sale of its Vauxhall and Opel brands to PSA, the French carmaker, by the end of the year.

G.M., the nation's largest automaker, reported net income of $1.66 billion during the quarter that ended in June, compared with $2.87 billion in the same period in 2016. Excluding one-time charges, the company reported earnings per share of $1.89. The profit can be calculated as $1.89 per share.

The company reported revenue for the quarter of $37 billion, down from $37.4 billion a year earlier and below the $40.1 billion expected by analysts. Shares were up 0.7 percent at $36.07 at mid-afternoon.

In North America, GM reported a pre-tax profit of $3.5 billion, down from $3.7 billion in the same quarter previous year.

Stevens said GM is on track to hit its North American inventories target to about 70 days' supply, and predicted sales in the second half of the year would rise.



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