General Motors lifted its full-year profit outlook Tuesday due to plans to cut new product investment and slash operating costs by an additional $1 billion through the end of next year.
GM now expects full-year net income of $9.3 billion to $10.7 billion, up from a previous forecast of $8.4 billion to $9.9 billion. The increased outlook comes as GM has seen stronger demand and pricing power than initially anticipated this year.
GM plans to spend $11 billion to $12 billion on capital investments this year, down from an earlier plan of $11 billion to $13 billion. The company also aims to cut overhead, marketing, and other operating costs by an additional $1 billion by 2024.
The profit boost comes despite pressure on GM's margins. While net income for the second quarter rose 52% to $2.6 billion, GM's pretax margins fell to 8.3% for the first half of the year compared to 8.9% a year ago.
In China, GM reported a profit of $78 million but said it is still earning far less there due to growing competition.
