General Motors Chairman and CEO Mary Barra announces a $300 million investment in the GM Orion Assembly Plant plant for electric and self-driving vehicles at the Orion Assembly Plant on March 22, 2019 in Lake Orion, Michigan.
Bill Pugliano | Getty Images
General Motors reported higher-than-expected first-quarter profits as the company shaved costs and sold more expensive trucks, SUVs and crossover vehicles.
Investors, however, were disappointed by revenue that missed Wall Street estimates amid falling vehicle sales and sliding market share. GM shares slid by 2.5% in premarket trading Tuesday.
Revenue fell 3.4% to $34.88 billion from $36.1 billion during the same quarter last year. The company’s total U.S. market share tumbled to 16.1% from 17 % a year earlier.
Here’s what the company reported, versus average analysts estimates compiled by Refinitiv:
- Adjusted earnings: $1.41 per share vs $1.11 per share forecast
- Revenue: $34.9 billion vs $35.28 billion forecast
The company’s adjusted earnings per share got a 31 cent-boost by revaluations of GM’s stake in ride-hailing firm Lyft and French auto maker PSA Group. GM’s profit margins also improved from selling more expensive trucks. The average sales prices for some of its recently updated full-size pickup trucks, including the Chevrolet Silverado and GMC Sierra, rose by $5,800 year-over-year against outgoing models.
A slowdown vehicle sales in China, the world’s largest auto market, strained the company’s performance there. GM’s first-quarter income in China fell 37% to $376 million from the same period a year earlier, and its sales slipped 18% in the country.
In April, the company reported sales that fell 7% from a year ago, but said that buyers were interested in its more expensive sport utility vehicles and pickup trucks. It plans to launch more full-size pickups in the second half of 2019, with two new heavy duty pickups from Chevrolet and GMC.
As part of its plan to adapt to changing market demands, GM has idled factories that produce slow-selling vehicles, consequently cutting more than 14,000 jobs at factories in the U.S. and Canada. The company is also shifting focus towards self-driving and electrified vehicles.
Shares of GM have risen more than 6% over the last 12 months and are up more than 20% since the beginning of the year.