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.

Cases: 735999

Reported Deaths: 13486
CountyCasesDeaths
Marion1007151752
Lake54249977
Allen40946680
St. Joseph36335553
Hamilton35829408
Elkhart28844443
Tippecanoe22475219
Vanderburgh22367397
Porter18946311
Johnson18067381
Hendricks17317315
Clark13036192
Madison12762339
Vigo12501249
LaPorte12086215
Monroe11957172
Delaware10755187
Howard10001218
Kosciusko9466117
Hancock8373142
Bartholomew8098156
Warrick7799155
Floyd7690178
Grant7098174
Wayne7072199
Boone6745101
Morgan6611140
Dubois6166117
Marshall6111112
Cass5876105
Dearborn583178
Henry5785105
Noble565984
Jackson503773
Shelby494396
Lawrence4602120
Gibson437192
Harrison436672
DeKalb430585
Clinton428453
Montgomery425889
Whitley398739
Huntington394480
Steuben391057
Miami383968
Knox372890
Jasper372649
Putnam363760
Wabash355380
Adams342755
Ripley340770
Jefferson331881
White317754
Daviess298399
Wells292081
Decatur285992
Fayette282162
Greene280585
Posey272034
LaGrange268970
Scott267554
Clay261347
Washington242132
Randolph242081
Spencer232931
Jennings230949
Starke219354
Fountain213946
Sullivan212242
Owen203356
Jay197830
Fulton196040
Carroll190420
Orange184754
Perry184637
Rush174025
Vermillion170044
Franklin168535
Tipton163445
Parke146716
Pike135634
Blackford135132
Pulaski117445
Newton108934
Brown102641
Crawford101415
Benton99014
Martin89515
Warren82615
Switzerland7948
Union71410
Ohio57111
Unassigned0417

Ohio Coronavirus Cases

Data is updated nightly.

Cases: 1091623

Reported Deaths: 19528
CountyCasesDeaths
Franklin1268061406
Cuyahoga1132982134
Hamilton804211211
Montgomery518231015
Summit47606955
Lucas42618792
Butler38548585
Stark32661909
Lorain25199486
Warren24390300
Mahoning21795588
Lake20846371
Clermont19880240
Delaware18608133
Licking16488212
Fairfield16327200
Trumbull16196468
Medina15379266
Greene15143244
Clark14096299
Wood13168189
Portage12966206
Allen11740232
Richland11433199
Miami10713220
Wayne8923214
Columbiana8881229
Muskingum8831133
Pickaway8596121
Marion8561136
Tuscarawas8509245
Erie7958155
Hancock6944128
Ashtabula6904172
Ross6876156
Geauga6741148
Scioto6444102
Belmont5978168
Union575448
Lawrence5590102
Jefferson5583151
Huron5462120
Sandusky5380122
Darke5374126
Seneca5311122
Washington5228109
Athens520858
Auglaize494986
Mercer481585
Shelby470293
Knox4513110
Madison439363
Putnam4301101
Ashland426590
Fulton426469
Defiance424697
Crawford3993107
Brown397557
Logan383276
Preble381398
Clinton374163
Ottawa369081
Highland356862
Williams343475
Champaign335358
Guernsey317653
Jackson314152
Perry295950
Morrow287239
Fayette283550
Hardin271964
Henry270366
Coshocton266157
Holmes2625101
Van Wert244263
Adams240053
Pike238634
Gallia236749
Wyandot232155
Hocking216462
Carroll192448
Paulding174340
Meigs145540
Noble134137
Monroe132542
Harrison109637
Morgan108823
Vinton84915
Unassigned02
Fort Wayne
Partly Cloudy
75° wxIcon
Hi: 78° Lo: 54°
Feels Like: 75°
Angola
Partly Cloudy
75° wxIcon
Hi: 77° Lo: 51°
Feels Like: 75°
Huntington
Partly Cloudy
73° wxIcon
Hi: 75° Lo: 56°
Feels Like: 73°
Decatur
Partly Cloudy
75° wxIcon
Hi: 77° Lo: 55°
Feels Like: 75°
Van Wert
Partly Cloudy
78° wxIcon
Hi: 79° Lo: 53°
Feels Like: 79°
A system will bring spotty showers and thunderstorms to the region Wednesday afternoon.
WFFT Radar
WFFT Temperatures
WFFT National

Community Events