GM jumps 9% as gas guzzlers offset EV, China losses
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The news: General Motors beat Wall Street expectations for Q3 earnings, showing demand for its highest-margin vehicles more than offset losses from its EV business and in China, with its shares surging as much as 9.52% to the highest level since February 2022.
The numbers: Resilient consumer demand for trucks and SUVs drove GM’s adjusted earnings per share to USD2.96 ($4.43), surpassing the USD2.43 forecast, according to Reuters.
Revenue reached USD48.8 billion, ahead of the expected USD44.6 billion. It raised its pretax profit forecast for 2024 from a minimum of USD13 billion to at least USD14 billion, citing strong pricing in the US.
But it also posted a USD137 million loss in China in the third quarter, continuing a difficult year in the Asian nation.
Shares rose as much as 9.52% to USD53.59 each after the result. The stock has gained 48% this year, outpacing rivals Stellantis and Ford Motor, whose share prices have fallen over the same period.
The context: Amid growing competition from Chinese automakers and Tesla’s dominance in the US, GM is under pressure to accelerate its shift to profitable EV production.
While electric vehicles currently make up only about 4% of GM’s US deliveries, the company has increased EV sales every quarter this year as it ramps up production of models like the Silverado EV truck and Equinox electric SUV.
GM also plans to restructure its operations in China after losing almost USD350 million there so far this year over three consecutive quarters.
What they said: "The consumer has held up remarkably well for us," GM’s chief financial officer Paul Jacobson said.
The sources: GM release , Reuters
