STREAMING NOW: Watch Now

GM, other US industrial giants, hit all-time highs

Without paper loss, GM makes $2.5B, beats Wall Street estimates.

Posted: Oct 24, 2017 7:10 AM
Updated: Oct 24, 2017 5:11 PM

By TOM KRISHER
AP Auto Writer

DETROIT (AP) - Shares of General Motors hit an all-time high Tuesday as investors focused on a $2.5 billion third-quarter pretax profit and ignored a big accounting loss.

The Detroit automaker's $3 billion net loss came from a $5.4 billion charge for selling Opel and Vauxhall to France's PSA Group, which closed in August. But with that backed out and before taxes, the company made $1.32 per share, trouncing Wall Street estimates. Analysts polled by FactSet expected $1.11 per share.

Much of the accounting charge came from previous losses that GM can't use to offset future tax obligations.

Revenue without Europe fell 14 percent to $33.6 billion, but that also beat expectations of $32.2 billion.

After hitting the record early, GM shares pulled back to $46.08, a 2 percent gain.

GM says its strong pretax performance came despite a 26 percent production cut in North America during the quarter to close out the 2017 model year and adjust to slowing demand, mainly for passenger cars. The company made just over $2 billion pretax in North America, as well as just under $500 million from its joint venture in China.

Chief Financial Officer Chuck Stevens said the company sold more high-profit trucks and SUVs and fewer lower-margin sedans, but it also cut costs at an annual running rate of $5 billion since 2014. The company also has cut low-profit sales to rental car companies. Stevens attributed the performance to "overall resilience of a better business model that we built in North America."

Investors overlooked the loss because GM has worked hard to shed unprofitable businesses and make its operations more efficient, said Jeff Windau, an industry analyst with Edward Jones.

The company also was helped by strong SUV demand in North America, where it makes the bulk of its profits, Windau said.

Still, Edward Jones rates GM a "hold" rather than buy or sell. Windau says he's concerned about spending on electric and autonomous vehicles with demand yet to be seen. GM also faces intense competition in China and the potential for rising material costs.

On a conference call with industry analysts, GM executives also gave details about autonomous vehicles and other business developments:

- When GM's revamped pickup truck debuts next fall, GM will have a "broader portfolio" to compete with Jeep and others in off-road performance, CEO Mary Barra said. New full-size SUVs will be built on the same underpinnings.

- GM will start testing autonomous vehicles without a human backup driver "in quarters, not years," but will not do that until the cars meet metrics to prove they are safe, Barra said. She didn't say how many quarters.

- GM and its Cruise Automation self-driving vehicle unit could partner with another company or GM could deploy the cars on its own, Barra said. The company also is evaluating international markets, including Berlin and London, to test autonomous vehicles.

- The company lost production of about 20,000 Chevrolet Equinox compact SUVs during a nearly monthlong strike recently by auto workers at a factory in Canada, Stevens said. That production will not be made up, he said. The strike ended Oct. 16.

With Europe no longer included, GM reported profits for all of its business units for the first time since the fourth quarter of 2014. Even South America, which has been a money loser in recent quarters, posted a $52 million pretax profit.

With European operations backed out, GM posted a net profit from continuing operations of $100 million.

Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Indiana Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 114236

Reported Deaths: 3548
CountyConfirmedDeaths
Marion21067764
Lake10397321
Elkhart6477109
St. Joseph6312105
Allen6113201
Hamilton4803109
Vanderburgh353630
Hendricks2694123
Monroe253136
Tippecanoe234713
Johnson2291123
Clark218756
Porter210546
Cass19399
Delaware191861
Vigo180324
Madison161975
LaPorte140540
Floyd135161
Howard129263
Warrick123436
Kosciusko121117
Bartholomew115557
Marshall99724
Dubois96418
Boone96046
Hancock91743
Grant90334
Noble90032
Henry79326
Wayne75114
Jackson7469
Morgan70938
Shelby66829
Daviess65828
Dearborn64728
LaGrange63411
Clinton59514
Harrison56624
Putnam54211
Knox5139
Lawrence51028
Montgomery50721
Gibson4964
White48314
DeKalb46811
Decatur45839
Miami4313
Greene42235
Fayette41913
Jasper3902
Steuben3787
Scott36711
Sullivan33312
Posey3160
Jennings31212
Franklin30325
Clay2995
Orange28824
Ripley2878
Carroll27313
Wabash2638
Washington2631
Whitley2617
Starke2597
Adams2553
Wells2513
Jefferson2473
Fulton2352
Spencer2283
Huntington2253
Tipton22122
Perry21613
Randolph2117
Jay1760
Newton17211
Owen1681
Martin1640
Rush1544
Pike1431
Vermillion1270
Fountain1202
Pulaski1161
Blackford1143
Brown1043
Crawford1040
Parke972
Benton880
Ohio787
Union780
Switzerland690
Warren391
Unassigned0226

Ohio Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 147744

Reported Deaths: 4715
CountyConfirmedDeaths
Franklin26545606
Cuyahoga17327656
Hamilton12953315
Montgomery7667157
Lucas7230364
Butler5838110
Summit5237252
Marion308347
Mahoning3030281
Warren300249
Stark2817170
Pickaway264444
Lorain229586
Delaware221620
Fairfield206752
Columbiana192480
Licking189863
Trumbull1876132
Wood180472
Clark177740
Clermont167923
Lake160850
Medina145139
Greene142032
Allen140869
Miami140751
Portage111666
Mercer110118
Erie93246
Tuscarawas92820
Wayne91967
Ross86823
Richland83919
Madison80212
Darke78442
Belmont71827
Geauga71348
Hancock68610
Ashtabula65548
Athens6532
Lawrence64122
Shelby61010
Auglaize5859
Putnam57923
Sandusky55820
Huron5427
Union5152
Scioto4896
Ottawa46930
Seneca46414
Preble43015
Muskingum3922
Holmes3857
Jefferson3354
Logan3083
Henry30613
Champaign3023
Perry2939
Defiance28811
Clinton28613
Brown2842
Knox28215
Washington25823
Morrow2572
Hardin25213
Jackson2466
Fulton2411
Ashland2364
Coshocton23311
Crawford2316
Fayette2286
Highland2223
Wyandot20812
Williams2063
Gallia18913
Pike1790
Meigs17410
Guernsey1678
Hocking1619
Carroll1527
Adams1264
Van Wert1163
Monroe11018
Paulding1070
Harrison632
Morgan470
Vinton473
Noble280
Unassigned00
Fort Wayne
Clear
66° wxIcon
Hi: 80° Lo: 56°
Feels Like: 66°
Angola
61° wxIcon
Hi: 80° Lo: 56°
Feels Like: 61°
Huntington
Clear
60° wxIcon
Hi: 79° Lo: 56°
Feels Like: 60°
Decatur
Clear
63° wxIcon
Hi: 80° Lo: 56°
Feels Like: 63°
Van Wert
Clear
63° wxIcon
Hi: 81° Lo: 57°
Feels Like: 63°
Warm, Summer-Like Weekend
WFFT Radar
WFFT Temperatures
WFFT National

Community Events