General Motors shares rose 3% Thursday after second-quarter earnings topped analyst estimates as sales of more profitable pickup trucks and crossovers, offset weaker sales in China.
Here’s what GM reported against average analysts’ estimates compiled by Refinitiv:
- Adjusted EPS: $1.64 vs. $1.44, estimated
- Revenues: $36.1 billion vs. $35.98 billion, estimated
“We had a solid second quarter, and expect the second half of the year to be stronger than the first half. Our confidence in our full-year outlook is based on our strong full-size truck rollout, other key launches and ongoing cost savings,” said CFO Dhivya Suryadevara.
GM reported second-quarter net income of $2.41 billion, or $1.66 per share, compared with $2.39 billion, or $1.66 per share, a year earlier. Excluding one-time items, GM earned $1.64 per share, solidly outpacing analyst estimates of $1.44 per share.
Net revenue fell 1.9% to $36.1 billion from $36.8 billion.
In North America, the company’s adjusted earnings before interest and taxes rose to $3 billion from $2.7 billion a year ago.
The company delivered 747,000 vehicles in the U.S., a 17% increase year-over-year and a second-quarter record led by crossover sales. Market share in North America fell to 15.8% from 16.1% during the second quarter last year.
However, income from China dropped 60.3% over the same quarter last year with the Detroit automaker reporting income of $235 million down from 2018’s record income of $592 million. China also reported sales that were down 12% citing an overall market decline.
“We do expect China to be down year over year,” Suryadevara said in an interview with CNBC.
GM China expects to benefit from about 20 new vehicle launches, the majority of which will go on sale later in the year and consist of SUVs.
GM reaffirmed its full year forecast for diluted earnings per share of $5.14.
In April, GM said vehicle sales fell 7% from a year ago, but said that buyers were opting for the company’s more expensive sport utility vehicles and pickup trucks. GM plans to launch more full-size pickups during the second half of 2019, with two new heavy-duty pickups from Chevrolet and GMC.
GM has recently cut more than 14,000 jobs at factories in the U.S. and Canada after idling factories that produced slow-selling vehicles. The company is also shifting focus toward self-driving and electrified vehicles like the Chevy Bolt EV.
Shares of GM have risen more than 7% over the last 12 months and are up more than 21% since the beginning of the year.
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