GM posts $2.5 billion 3Q profit on strong results in key markets

October 31, 2018 13:47 CET

DETROIT — Stronger-than-expected results in China and North America propelled General Motors to a 25 percent increase in pretax profit in the third quarter and net income of $2.5 billion.

GM’s revenue increased 6.4 percent to $35.8 billion in the third quarter. The company announced a global profit margin of 8.8 percent, including 10.2 percent in North America.

The 2018 results for the third quarter compare to a loss of almost $3 billion a year ago, due to the sale of its Opel/Vauxhall European operations. GM’s pretax profit grew by $630 million from a year earlier to $3.2 billion.

The results significantly beat Wall Street’s estimates and have the automaker bullish on achieving, if not exceeding, the top range of its guidance for 2018. GM said it expects to end 2018 with 9 to 10 percent North American profit margins, free cash flow of $4 billion and earnings of about $6 a share.

Regions: North American earnings increased 37 percent to $2.8 billion, up from $2.1 billion a year earlier. Earnings for the company’s international operations declined to $139 million from $389 million a year earlier, but China achieved a record third-quarter equity income of $485 million.

Finance: GM Financial reported earnings of $498 million from continuing operations, up from $310 million a year earlier.

Expectations: GM beat Wall Street’s expectations for a 14th consecutive quarter. The company reported earnings of $1.87 a share, above analysts’ forecasts of $1.25.

GM Cruise: The company’s autonomous vehicle operations had a net loss of $214 million in the third quarter. For the year, the company has invested $534 million into the operations. It plans to invest about $1 billion into GM Cruise in 2018.

Before the earnings announcement, GM shares were up 1.2 percent to $33.54 in premarket trading. GM on Tuesday declared a fourth-quarter dividend of 38 cents a common share.

You can reach Michael Wayland at mwayland@crain.com.

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