GM on track for solid year as profit tops quarterly estimates
Vehicle maker forecasts strong full-year profit on high US demand and a favourable tax rate
Detroit — General Motors (GM) on Wednesday posted far stronger-than-expected quarterly profit and said its full-year earnings forecast would come in at the high end of its forecast due to strong demand in North America.
GM shares jumped 7.6% in premarket trading.
The Detroit vehicle maker reported third-quarter net income of $2.53bn, or $1.75 a share, compared with a loss IN 2017 of $2.98bn, or $2.03 a share. The 2017 quarter included a charge related to Europe.
Excluding one-time items, GM earned $1.87 a share in the third quarter, easily beating the $1.25 analysts polled by Refinitiv had expected. Revenue in the quarter rose 6.4% to $35.8bn, above the $34.85bn analysts had expected.
GM was able to push through higher pricing, mostly in North America, allowing it to benefit by $1bn in the quarter, offsetting higher commodity costs.
Those pricing gains are sustainable, the company’s CFO Dhivya Suryadevara said.
“Our third-quarter performance demonstrates our determination to manage risks and deliver strong business results,” GM CEO Mary Barra said in a statement.
The Detroit vehicle maker said it still sees a full-year profit in the range of $5.80 to $6.20 a share, but said it now expected to finish at the high end of the range with potential to finish even higher. It cited a favourable tax rate and its strong performance.
In July, GM lowered its full-year forecast, citing higher steel and aluminium costs due to tariffs imposed by US President Donald Trump’s administration. — Reuters