Upward prices, margins boost GM's third quarter
Upward prices, margins boost GM's third quarter
Even with car sales beginning to decline in the US. US, China and elsewhere, General engines it posted a strong gain in the third quarter, surpassing Wall Street's expectations of rising prices in North America and surprising recovery capacity in China.
GM reported a net profit of $ 2.5 billion in the third quarter on Wednesday, or $ 1.75 per share. According to a survey conducted by FactSet, the company earned $ 1.87, far surpassing analysts' projections of $ 1.25 per share.
Revenues increased 6.4 percent to $ 35.8 billion, also exceeding forecasts. The Detroit automaker posted a record $ 500 million revenue from July to September in China despite declining sales and rising commercial tensions. And its pre-tax profit in North America, its most lucrative market, rose 33 percent to $ 2.8 billion, with a profit margin of 10.2 percent.
CFO Dhivya Suryadevara said the company received help in the quarter by getting solid prices across its entire model line, especially for the recently redesigned Chevrolet Silverado and GMC Sierra trucks.
"Our discipline came through this quarter," Suryadevara said, adding that he believes strong prices are sustainable as GM builds a light-duty pickup inventory and launches heavy-duty versions. "We feel very confident about the prices."
The average sale price of a vehicle in the United States reached $ 36,000, $ 800 more than a year ago and a record in the third quarter. Director General Mary Barra said that GM will remain disciplined in the fourth quarter and that it will be competitive in all segments.
The company also gave a more optimistic forecast for the full year, saying it expects pretax earnings at the higher end of its previous guidance of $ 5.80 to $ 6.20 per share as the new pads roll out and do everything possible to combat the higher costs of basic products. "We are controlling what we can control," said Suryadevara. "We have had a heavy focus on costs."
The strong profit of GM's joint venture in China even came with a looming war of tariffs with the US. UU And the uncertainty about sales in the largest automotive market in the world.
GM shares rose more than 6 percent in premarket trading on Wednesday to $ 35.70.
The strong performance came despite GM's global retail sales to individuals dropping 15 percent during the quarter to 1.98 million vehicles. But dealer sales, the point at which GM records revenue, rose 4.5 percent to 1.13 million.
GM was hit once again by the costs associated with its giant memory for defective ignition switches. The company published a charge of $ 440 million when updating the estimated costs of legal claims.
A year ago, GM recorded a net loss of $ 3 billion due to a charge of $ 5.4 billion from the sale of Opel and Vauxhall to FrancePSA group.
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