Published: Fri, February 08, 2019
Finance | By Loren Pratt

GM posts $8.1B profit; offer up to $10,750 in profit sharing

GM posts $8.1B profit; offer up to $10,750 in profit sharing

General Motors Co on Wednesday reported a quarterly profit that exceeded Wall Street expectations, thanks to high-margin pickup trucks and small SUVs in the US market and cost cutting.

Workers should see the payments in their February 22 paycheck, GM said in a Wednesday statement. The new Chevrolet Silverado and GMC Sierra pickups are now hitting the market in greater numbers, which helped boost GM's results in the USA during the quarter.

Earlier this week, GM said it would begin to cut $4,000 white-collar workers. However, many of those jobs will go to workers "from unallocated plants", according to President Mark Reuss. But it says there are 2,700 openings for USA workers at factories across the nation. General Motors's quarterly revenue was up 1.8% on a year-over-year basis. Without special items for restructuring, the profit was $6.54, beating Wall Street expectations of $6.29.

"Our outlook for China overall is for the auto industry to be flat year over year", Dhivya Suryadevara, GM's Chief Financial Officer, said in a statement, cited by Reuters. Losses at the GM Cruise self-driving-car unit widened to $728 million last year and will probably cost the automaker $1 billion this year.

Excluding those charges, the automaker had reported net income of $2.4 billion.

'GM delivered another strong year of earnings in a highly volatile environment in 2018. "The actions we've been taking to shape a stronger, more profitable portfolio of businesses position GM for long-term success".

In premarket trading on Wednesday, the shares were up 4 percent, or $1.58, to $39.30.

New vehicle sales in the United States are widely expected to decrease during the current year as a result of higher interest rates and competition from a superfluity of less expensive, nearly-new used vehicles on the market. Cruise Automation, GM's autonomous vehicle unit, lost $728 million, 19 percent more than a year earlier. GM is cutting costs, reining in production and pushing sales of Cadillac to offset the declines at its mainstream brands, Buick and Chevrolet. The business had revenue of $38.40 billion for the quarter, compared to the consensus estimate of $36.31 billion.

The shares of General Motors Company (NYSE:GM) has been pegged with a rating of Neutral by Goldman in its latest research note that was published on September 11th, 2018. Suryadevara said she expects an adjusted profit of $6.50 to $7 per share. General Motors Company (NYSE:GM)'s price to sales ratio for trailing twelve month stands at 0.37, whereas its price to book ratio for the most recent quarters is at 1.46.

Earlier Wednesday, Toyota Motor Corp posted a slightly higher profit as demand for its bread-and-butter vehicle models from cost-conscious Chinese buyers helped offset weak North American sales of its marquee sedan models such as the Corolla and Camry.

Shares of General Motors Company have risen 19.31% so far in 2019 compared with an 8.97% gain for the benchmark index, S&P 500 (SPX).

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