Here’s how to evaluate GM’s slide in shares today

CNBC Television published this video item, entitled “Here’s how to evaluate GM’s slide in shares today” – below is their description.

The Investment Committee discusses General Motors’ sliding stock, which they all own. Jim Lebenthal is confident this is temporary and as soon as the chip shortage abates, the company will rebound. And, Joe Terranova debates whether it’s worth dumping General Motors in favor of other stocks like CarMax. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi

General Motors on Wednesday missed Wall Street’s earnings expectations for the second quarter despite a record operating profit. It also raised its guidance for the year.

Here’s how GM did compared with what Wall Street expected based on average estimates compiled by Refinitiv.

Adjusted EPS: $1.97 vs. $2.23 expected

Revenue: $34.17 billion vs. $30.9 billion expected

GM’s second-quarter earnings were dragged down by some $1.3 billion in warranty recall costs, including $800 million related to the Chevrolet Bolt EV. The electric vehicle has been recalled twice in the past year due to fire risks, most recently last month.

The automaker raised its adjusted full-year guidance to between $11.5 billion and $13.5 billion, or $5.40 to $6.40 a share, up from $10 billion to $11 billion, or $4.50 to $5.25 a share.

But the second-quarter results were at the low end of GM’s previously guided range and the increased guidance for the year was lower than some analysts expected. GM CFO Paul Jacobson described the company’s outlook to investors Wednesday as “cautious.”

GM shares were down by more than 8% during Wednesday morning trading to about $53 a share.

The automaker expects headwinds of between $3.5 billion and $4.5 billion during the second half of the year, including commodity costs rising by $1.5 billion and $2.0 billion and lower earnings from its financial arm. GM also expects to produce about 100,000 vehicles less in North America during the second half of the year compared to the first six months.

On an unadjusted basis, net income was $2.8 billion for the second quarter compared with a loss of $758 million a year earlier, when the coronavirus pandemic caused rolling shutdowns of its factories. The automaker reported pretax adjusted earnings of $4.1 billion for the second quarter, up from a loss of $536 million a year earlier.

“Everyone has been demonstrating remarkable resiliency and adaptability in this rapidly changing environment,” GM CEO Mary Barra said Wednesday during a call with reporters.

The adjusted earnings were a record for the second quarter, topping GM’s adjusted earnings before interest and taxes of $3.9 billion, or $1.86 a share, in 2016.

GM has been weathering challenges from a global shortage of semiconductor chips, which has caused factory shutdowns and is expected to shave billions off the industry’s earnings in 2021.

» Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision

» Subscribe to CNBC: https://cnb.cx/SubscribeCNBC

» Subscribe to CNBC Classic: https://cnb.cx/SubscribeCNBCclassic

Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide.

The News with Shepard Smith is CNBC’s daily news podcast providing deep, non-partisan coverage and perspective on the day’s most important stories. Available to listen by 8:30pm ET / 5:30pm PT daily beginning September 30: https://www.cnbc.com/2020/09/29/the-news-with-shepard-smith-podcast.html?__source=youtube%7Cshepsmith%7Cpodcast

Connect with CNBC News Online

Get the latest news: http://www.cnbc.com/

Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC

Follow CNBC News on Facebook: https://cnb.cx/LikeCNBC

Follow CNBC News on Twitter: https://cnb.cx/FollowCNBC

Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC

https://www.cnbc.com/select/best-credit-cards/

#CNBC

#CNBCTV

CNBC Television YouTube Channel

Got a comment? Leave your thoughts in the comments section, below. Please note comments are moderated before publication.

About This Source - CNBC Television

CNBC is an American pay television business news channel, which primarily carries business day coverage of U.S. and international financial markets. Following the end of the business day and on non-trading days, CNBC primarily carries financial and business-themed documentaries and reality shows.

As of February 2015, CNBC is available to approximately 93,623,000 pay television households (80.4% of households with television) in the United States.

Recent from CNBC Television:

  • NASA predicts giant asteroid could hit Earth in 2182
  • Family members push to make Surfside condo collapse sight a memorial
  • Analyst Ivy Zelman sees a lot of ‘red flags’ in housing market and is staying on the sidelines
  • In This Story: COVID-19

    Covid-19 is the official WHO name given to the novel coronavirus which broke out in late 2019 and began to spread in the early months of 2020.

    Symptoms of coronavirus

    The main symptoms of coronavirus are:

    • a persistent new cough (non productive, dry)
    • a high temperature (e.g. head feels warm to the touch)
    • shortness of breath (if this is abnormal for the individual, or increased)

    Latest News about Covid-19

    Below are stories from around the globe related to the 2020 outbreak of novel Coronavirus – since the WHO gave the Covid-19 naming. Most recent items are posted nearest the top.

    5 Recent Items: COVID-19

  • ‘Gen Z’ Thai protesters and police blame each other for violence at key Bangkok intersection
  • Fears AFL grand final will trigger super spreading event | Coronavirus | 9 News Australia
  • NSW reaches 85 per cent first dose as vaccine hesitancy hits all time low | 7NEWS
  • New fears of COVID superspreader event after Bondi Beach party | 7NEWS
  • NSW closes in on 60 per cent fully vaccinated | Coronavirus | 9 News Australia
  • Leave a Comment

    We don't require your email address now, just your name. BUT, if you do add it, you may be notified if there are replies to your comment. Please make respectful comments, which add value, and avoid personal attacks on others. Comments failing to adhere to these guidelines will not be published.