Strong demand of new pickups lineup boosts GM profits higher than expected
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General Motors Co. today posted a third-quarter net income of US$ 2.5 billion boosted by stronger-than-expected results in China and North America, where the Detroit automaker experienced strong sales of GM’s crossovers and pickups, including the redesigned 2019 Chevrolet Silverado and GMC Sierra. Total revenue increased 6.4% to US$ 35.8 billion during the period.
GM earnings for the three months ending in September came in at US$ 1.87 per share, well above the US$ 1.25 most analysts expected.
Net income from operations in North America rose 36.7% to US$ 2.83 billion, even as deliveries fell 9.8%, although a rise in average transactions prices (ATP) allowed margins to improve to 10.2% even as input costs rose thanks in part to U.S tariffs on steel and aluminum imports.
GM delivered nearly 700,000 vehicles in the U.S. in the third quarter. Average transaction prices rose to a third-quarter record of more than US$ 36,000, up about US$ 800 per unit year over year and US$ 4,000 above industry average.
“The launch of our new trucks continues to be ahead of schedule and response to our truck-for-every-customer strategy has been positive. Sales of the new high-margin Chevrolet Silverado LTZ and High Country crew-cab models are more than 30% above forecast, and the new GMC Sierra SLT, Denali and AT4 crew-cab models are selling within two weeks,” said CEO Mary Teresa Barra during the conference call.
The first light-duty 2019 Chevrolet Silverados and GMC Sierras began arriving in dealerships in August. Customer deliveries of the Silverado LTZ and High Country and the GMC Sierra SLT, Denali and AT4 crewcab models have exceeded expectations as production ramps up to meet expected demand. GM expects to ship about 120,000 of the new trucks in the second half of 2018.
“Third-quarter 2018 earnings results reflecting profitability in all core operating segments,” said the company in its earnings report.
GM operates assembly plants in Ramos Arizpe, Coahuila; San Luis Potosi and Silao, Guanajuato. The latter, along with a facility in Fort Wayne, Indiana, supplies the new generation of Silverado and GMC Sierra pickup trucks for the North American market.