Shares of legacy automotive manufacturer General Motors Co (GM:US) witnessed a pre-market surge on Tuesday after the industrial leader raised its full-year profit guidance. The uplifted guidance comes parrel to the company's contemporary strategy of investing less in new products and cutting operating costs. GM plans to cut an additional $1 billion through the end of the next year.
In the latest news release, the company reported a staggering increase of around 52% in its net income for Q2, amounting to nearly $2.6 billion. Revenue grew 25% from the year-ago period and expectations for full-year net income increase to between $9.3 billion and $10.7 billion. The previous forecast for FY's net income was $8.4 billion to $9.9 billion.
On a per-share basis, GM is now forecasting net income of $7.15 to $8.15 for the year, up from a range of $6.35 to $7.35.
The automaker's decision to slash operational costs and new product investments comes as a result of the intense pressure which is experienced by the company's profit margins.
"We're focused on profitability. Our recent results demonstrate that we're not sacrificing margin for volume. We will continue this strategy to help drive a fundamentally stronger company beyond 2023." GM's CFO Paul Jacobson stated
Catering to international markets, GM reported a profit of around $78 million secured in its 2nd largest marker - China. The company regained its position in the challenging market across borders by reversing year-ago losses, but still, the earnings are deemed less by its management, given its sturdy position before.
The shares of the Detroit-based giant were seen experiencing a surge of around 2% on Tuesdays Pre-market.