GM beats on earnings as Lyft investment pays off and pickups drive profits
- GM on Tuesday reported a higher-than-expected quarterly profit, driven mostly by highly lucrative pickup truck sales in the U.S. market.
- Results were lifted in part by revaluations of shares it holds in ride-hailing company Lyft.
GM beat estimates for first-quarter earnings, with positive results coming despite a 7 percent decline in US new-vehicle sales in the first quarter, in which its pickup trucks were outsold by smaller rival Fiat Chrysler Automobiles.
The higher profit also came despite a drop in sales in China of almost 20 percent and a corresponding decline in profit of 37 percent.The company had around four months supply of its Chevrolet Silverado pickup truck on the ground as of the beginning of April. The all-new Silverado was launched last year.
GM said in a statement it was "bullish" on pickup truck sales for the rest of 2019 as more versions of its new Silverado hit dealer showrooms and its heavy-duty trucks launch in the second half of the year.
"My confidence in the year ahead remains strong, driven by our all-new full-size truck launch and our ongoing business transformation," CEO Mary Barra said in a statement.
GM reported a first-quarter net profit of $2.2 billion, or $1.48 per share, up from $1.05 billion, or 72 cents per share, a year earlier. Excluding one-items, the company reported earnings per share of $1.41.
Analysts had on average expected earnings per share of $1.11.
GM's pre-tax earnings fell more than 11 percent to $2.3 billion from $2.6 billion.GM has preferred shares in Peugeot from when it sold its German Opel unit to the French automaker in 2017. Lyft's initial public offering was at the end of the first quarter.
Shares of GM were trading down about 2% pre-market, to $39. The stock is up 17% year-to-date.
(Reuters reporting by Nick Carey and Ben Klayman.)