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Investors cheered a solid third quarter at General Motors Co GM.N as the automaker's performance and confidence tamped down growing fears of a global recession.
GM shares jumped more than 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.
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: "We haven’t seen any direct impact on our products. Pricing remains strong. Demand remains strong."
"We're still feeling very good" about the short-term environment, Jacobson added, saying GM does not anticipate layoffs.
Wedbush analyst Dan Ives in a research note called the results a "major step in the right direction for the Detroit stalwart."
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.
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.
EBIT-adjusted net margin in North America climbed nearly a point, to 11.2%.
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.
GM said it 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 important market for us. It’s not decisive to our financial performance.”
(Reporting by Ben Klayman, Paul Lienert and Joseph White, Editing by Kirsten Donovan, Bernadette Baum and Nick Zieminski)
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