General Motors leaps 7% after 3rd-quarter earnings double analyst expectations
- General Motors leaped as much as 7% in early trading Thursday after the company nearly doubled expectations for third-quarter earnings.
- Revenue for the period fell in line with estimates, while earnings of $2.83 per share trounced the $1.45 forecast.
- Strong truck and SUV sales in North America and China helped pull
GMfurther out of its virus-induced slump, interim CFO John Stapleton said in the earnings report.
- Overall US auto sales have surged post-pandemic, rising well above 2019 levels after a pandemic rout.
- Watch GM trade live here.
General Motors rallied as much as 7% in early trading Thursday after the automaker trounced third-quarter profit expectations.
Robust truck and SUV sales in North America lifted the company from its pandemic-induced rut, John Stapleton, GM's interim Chief Financial Officer, said in a press release. Sales in China also recovered faster than expected, he said. While revenues met forecasts, profit nearly doubled Wall Street's projections.
Here are the key numbers:
Revenue: $35.5 billion, in line with analyst estimates
Earnings per share: $2.83, versus the $1.45 estimate.
The quarterly windfall helped GM repay $5.2 billion of its revolving loan facilities over the three-month period, according to the report. An additional $3.9 billion was paid off last month.
The third-quarter performance "is a testament to GM's resilience," CEO Mary Barra said in the earnings report. The company's position heading into the pandemic allowed it to "conserve cash and preserve liquidity," she added.
The automaker continued to omit official guidance from its report. GM's former CFO Dhivya Suryadevara declined to offer forward guidance in the second quarter report due to coronavirus uncertainties.
GM's optimistic quarterly report follows similarly rosy earnings from Ford and Fiat Chrysler in recent weeks. Strong demand for trucks and SUVs led both companies to beat analyst expectations. While consumer spending in certain corners of the economy lags behind pre-pandemic highs, spending on cars and car parts has surged.
Across the industry, a surge in sales of new and used cars has taken the industry by surprise after a mid-pandemic rout. By September, sales of both new and used cars returned to pre-2019 levels, ALG data shows. For GM specifically, October 2020 sales were up about 9% over the same month in 2019.
GM closed at $35.24 per share on Wednesday, down roughly 3% year-to-date.
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