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General Motors about profit growth in the company

6 November 2020
1809
2 min.
4
General Motors about profit growth in the company

General Motors profit increased by 74%

General Motors (GM) shares, which fell 3.7 per cent since the beginning of the year, increased by 3.9 per cent on trading in the fourth quarter after the company's results for the third quarter.

General Motors reported a 65% increase in earnings per share to $2.83, an increase of $1.38 over analysts forecasts. Quarterly earnings increased by 74%.

Third quarter total revenue was $35.48 billion below analyst estimates of $35.51 billion, but this is a strong increase after revenues fell 53% in the second quarter as plants closed during the Coronavirus Pandemic. The company's strong quarterly results were achieved thanks to a faster-than-expected recovery in sales in two key markets: the US and China, along with ongoing cost control measures.

Overall, GM's U.S. quarterly sales fell 10 per cent in the third quarter, but the results improved from month to month and sales of the most profitable products remained strong throughout the quarter. The company's North American operating profit margin was a solid 15%. Barra Mary said: "GM benefits from strong consumer demand for our new vehicles and services, especially our full-sized pickup trucks and SUVs".

General Motors sales in China, where the COVID-19 pandemic peaked at the beginning of the year, increased by almost 12 percent compared to the third quarter of 2019. International sales fell by 4% to 1.793 million units.

The car manufacturer paid $5.2 billion in revolving loans during the third quarter and another $3.9 billion in October. The company said it expects to repay the balance by the end of the year "while maintaining a strong cash balance". The liquidity (available funds) of GM's automotive business exceeded the target of $37.8 billion at the end of the third quarter.

General Motors strong quarterly results were preceded by good news from its American competitors: Ford Motor (F) and Fiat Chrysler (FCAU), which also surpassed Wall Street's expectations, reporting higher than expected sales of pickups and SUVs in North America.

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Chairman and Chief Executive Officer, General Motors Company
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