General Motors’ posts strong Q3 results


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Investors cheered a solid third quarter (Q3) at General Motors Co as the automaker’s performance and confidence tamped down growing fears of a global recession.

GM shares jumped more than 5 per cent in premarket trading on Tuesday as the company’s strong North American truck sales and prices drove a higher quarterly profit that beat analysts’ estimates.

While investors have been concerned that a US economic slowdown could hurt demand for new vehicles, Chief Financial Officer Paul Jacobson said on Tuesday: “We haven’t seen any direct impact on our products. Pricing remains strong. Demand remains strong.”

“We’re still feeling very good” about the short-term environment, Jacobson added, saying GM does not anticipate layoffs.

Wedbush analyst Dan Ives in a research note called the results a “major step in the right direction for the Detroit stalwart.”

GM reaffirmed its guidance for full-year net income of $9.6 billion to $11.2 billion, and full-year diluted earnings per share of $5.76 to $6.76. Diluted earnings per share in the third quarter of $2.25 topped estimates for $1.88.

The automaker reported net income of $3.3 billion, compared with $2.4 billion a year earlier. Revenue jumped to $41.9 billion, from $26.8 billion a year ago.

The company said 90 per cent of its operating profit came from North America, where it earned $3.9 billion mostly from trucks and SUVs. GM boosted prices on vehicles sold in North America by an average of $2,678 per vehicle. EBIT-adjusted net margin in North America climbed nearly a point, to 11.2 per cent.

The automaker said higher volume in the quarter drove a $5-billion gain, with higher prices contributing a $2.1 billion gain, offset by $3.6 billion in additional logistics costs. GM has received 170,000 reservations for the new Chevrolet Silverado EV pickup, which arrives at US dealers next spring.


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