FILE PHOTO: The new GM logo is seen on the facade of the General Motors headquarters in Detroit, Michigan, U.S. REUTERS/Rebecca Cook
DETROIT: General Motors Co shares rose almost 5% 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.
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.
GM's net margin slipped to 7.9%, from 9.0% a year earlier.
The company said 90% 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.
While investors have been concerned that a U.S. economic slowdown could hurt demand for new vehicles, Chief Financial Officer Paul Jacobson said on Tuesday at a news briefing: "We haven’t seen any direct impact on our products. Pricing remains strong. Demand remains strong."
Chief Executive Mary Barra, in a letter to shareholders, cited improved supply chain conditions and said the company is "actively managing the headwinds we face."
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 U.S. dealers next spring.
The company said it captured 8% of the U.S. electric vehicle market in the quarter on record sales of the Chevrolet Bolt and Bolt EUV.
Barra said GM continues to negotiate supply agreements and direct investments in raw materials to help drive EV growth beyond 2025.
Its majority-owned Cruise automated driving unit now expects revenue of $1 billion in 2025, said GM, which plans to begin operating a robotaxi service in three cities by the end of this year.
GM earlier forecast annual revenue for Cruise of $50 billion by 2030.
The automaker posted a loss of $497 million on Cruise during the quarter, with a cumulative year-to-date loss of $1.4 billion.
GM's China income climbed to $330 million, compared with $270 million a year earlier.
Jacobson said, "China is an import market for us. It’s not decisive to our financial performance.” - Reuters
