General Motors on Thursday lifted its profit outlook for the full-year. The company also posted a record second-quarter earnings that easily surpassed consensus forecast. Shares were up more than 4 percent in the pre-market following the results.
The third-biggest automaker in the world is anticipating profit in a range of $5.50 per share to $6.00 per share for 2016, versus its earlier forecast in between $5.25 per share to $5.75 per share.
The company reported net income of $2.87 billion, or $1.81 per share for the second quarter, well above $1.1 billion, or 67 cents per share, in the same period last year. Excluding a $100 million charge for legal expenses, GM earned $1.86 per share in the latest quarter, well above $1.52 per share estimated by analysts.
GM generates more than 90 percent of its pretax profits from North America, where profit margins increased to 12.1 percent from 10.5 percent last year, helped by demand for pickup trucks and large SUV’s.
The company also posted its first quarterly profit in Europe in five years, though warned that currency and market disruptions triggered by UK’s decision to quit the European Union could compel the company to trim up to $400 million in expenses from second-half results in Europe.
GM revealed for the first time that it acquired the self-driving car start-up, Cruise Automation earlier this year in a cash and stock transaction valued at $580 million.
The Detroit-based automaker’s strong performance in North America helped produce $3.2 billion in free cash flow for the latest quarter. Chief Financial Officer, Chuck Stevens is expecting a free cash flow of $6 billion for the year.
The company said that it will repurchase up to $9 billion in shares through next year. However, Stevens said GM could review the plan in case cash flow surpasses expectations.