Iconic American automaker General Motors announced its third quarter results Thursday morning. They look fantastic.
General Motors (ticker: GM) reported $ 2.83 in earnings per share versus $ 35.5 billion in sales. Wall Street was looking for $ 1.38 in earnings per share against $ 35.4 billion in sales. GM has almost doubled the profit forecast.
The results are a huge step up from the terrible, pandemic-plagued second quarter, when GM only achieved $ 16.8 billion in sales. In addition, GM’s revenues are increasing year over year. The company earned $ 1.72 in the third quarter of 2019. Growth returned much faster than analysts expected.
“This year, and the third quarter, is a testament to GM’s resilience. We entered the pandemic from a position of strength and acted decisively to ensure the safety of our teams, conserve our liquidity and preserve our liquidity, while keeping our critical product programs on track, ”said the CEO Mary Barra in the company press release. “We are now well positioned to meet growing customer demand, accelerate our transformation and deliver on our vision of a world without accidents, emissions and congestion.” GM takes a big step forward in the electric vehicle and recently unveiled its all-electric Hummer.
GM reported $ 200 million in cost savings in the quarter and $ 4 billion in cost savings since 2018. The cost reductions show up in profits and profit margins. GM’s North American division, its top-grossing segment, generated $ 4.4 billion in operating profits in the third quarter, up from $ 3 billion in the same period last year. Operating profit margins increased to 15% from 10.8% a year ago.
GM loan unit profits also increased year over year, as high used car prices helped boost profitability.
If the gains hold, GM shares are likely to head green for the year. At Wednesday’s closing price, GM stock was down about 4%, just behind comparable returns from the Dow Jones Industrial Average and S&P 500. GM stock hit a peak in investor interest in the latter time. Shares have risen 14% in the last month and 34% in the past three months.
Management will hold a conference call for investors and analysts at 10 a.m. Eastern Time. Investors will be looking for additional clues to see if this strong performance can continue.
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