General Motors shares rose after the company beat quarterly estimates of earnings per share 3rd quarter, reporting a more rapid than expected recovery of sales in the United States and China.
Shares of General Motors (GM), which fell by 3.7% since the beginning of the year, rose 3.9% during trading on Thursday (at the time of writing) after the company announced results for Q3 ended 30 September.
General Motors reported an increase in earnings per share by 65% to $2,83, which was above analyst expectations of $1,38. The sum of the quarterly earnings grew 74% to $4,05 billion from $2.35 billion in the third quarter of 2019.
Total revenue for the third quarter of $35,48 billion lower than analyst estimates of $of 35.51 billion, but this strong growth after a fall of income by 53% in the second quarter amid factory closures during a pandemic coronavirus. See the quarterly history of revenue and profit of General Motors for the last 2 years can link.
Interim CFO General Motors John Stapleton noted that the high quarterly results, the company managed to achieve due to the faster than expected recovery of sales in two key markets: the United States and China, along with permanent measures to control costs.
Overall quarterly sales of GM in the USA in the third quarter fell by 10%, but results improved from month to month, and sales of most profitable products has remained strong throughout the quarter. Operating profit margin in North America was a solid 15%.
“GM is benefiting from steady consumer demand for our new cars and services, especially our full-size pickups and SUVs,” said the company in a press release.
“During the third quarter of large pickups, GM increased its share of the retail market by 1.7 percentage points, taking first place in the segment with a share of 37.5. Brand new full-sized GM SUVs are in great demand, the Chevrolet Tahoe and Suburban, and GMC Yukon and Yukon XL increased its share in the retail segment by three percentage points since the launch in the second quarter.”
Sales of General Motors in China, where the pandemic COVID-19 reached its peak at the beginning of the year increased by almost 12% compared to the third quarter of 2019. International sales fell 4% to 1,793 million units.
The automaker paid $5.2 billion in revolving loans during the third quarter and another $3.9 billion in October. The company said it expects to repay the balance by the end of the year “while maintaining a strong cash balance”.
Liquidity (available funds) of the automotive business, GM has exceeded the target and at the end of the third quarter was $37.8 billion.
Strong quarterly results from General Motors was preceded by good news from its American competitors Ford Motor (F) and Fiat Chrysler (FCAU), which also exceeded Wall Street expectations, reporting a higher-than-expected sales of pickups and SUVs in North America.