2 Reasons GM Is Poised for Strong Earnings
Six months ago, investors worried that the COVID-19 pandemic would be disastrous for General Motors (NYSE: GM). Shares of the top U.S. automaker lost half of their value between the beginning of 2020 and mid-March, due to fears of a huge slump in auto sales and big losses in the company's GM Financial subsidiary.
These concerns proved to be vastly overblown. While GM lost money in the second quarter, its financial results were much better than what analysts had expected. Now, the General is poised to return to profitability in the second half of the year, and recent data points hint at strong earnings potential for the next few quarters.
The first positive sign for GM is that demand for full-size trucks remains incredibly strong. Last quarter, combined deliveries of the Chevy Silverado and GMC Sierra declined just 12% year over year, despite exceptionally low inventory. GM's full-size truck inventory in North America bottomed out at 87,000 units in early June, compared to 270,000 units at the end of June 2019.
Source Fool.com
