GM’s shares post biggest percentage boost in over 4 years as business reports $3 billion returns in 3Q

DETROIT — Shares of General Motors surged almost 10% Tuesday after the automaker posted a $3 billion third-quarter returns, slightly less the same period a year ago. It was the stake’s biggest single day percentage boost in more than four years.

GM’s stake closed up 9.8% at $53.73, the biggest boost since March 24, 2020 and the highest worth this year.

The returns came even though GM’s U.S. sales were down and a once-reliably profitable joint enterprise in China lost money.

The Detroit automaker reported $48.8 billion in returns from July through September, 10% more than last year, aided by U.S. average vehicle sale prices that were steady with last quarter at over $49,000.

Chief financial Officer Paul Jacobson said that while overall sales in the U.S., GM’s most profitable trade, fell 2.2% in the quarter, much of that drop was from sales to large fleet buyers. Sales to individuals, which generally are more profitable, rose 3%.

While other automakers have gotten stuck with too many high-priced vehicles when many buyers are looking for lower costs, GM has yet to view such a shift, Jacobson told reporters.

During the quarter, the business gained $900 million year-over-year from higher prices, he said. About half of that came from sales of midsize SUVs such as the Chevrolet Traverse, he said.

“I ponder that the buyer has held up remarkably well for us,” he said, adding that next year should be consistent with this year as the Federal savings continues to reduce yield rates and lower borrowing costs. “Nothing that we’ve seen has changed from where we’ve been the last several quarters.”

Excluding one-period items, GM had an adjusted returns of $2.96 per distribute, beating Wall Street estimates of $2.38, according to FactSet. The business’s returns also soundly beat estimates of $44.67 billion.

The business’s joint enterprise in China, though, lost $137 million, compared with a $192 million returns a year ago. Jacobson said the deficit is a symptom of tough trade conditions there, where domestic brands are turning out well-built products at low costs.

The business, he said, is working with associate SAIC on restructuring the business, with several key meetings in the fourth quarter.

“We really haven’t instituted any of the real restructuring yet,” he said, adding that sales are up and inventory is down.

CEO Mary Barra said China is a challenging surroundings because some domestic brands “don’t seem to prioritize profitability, they’re definitely prioritizing production.”

She said GM can make money there in a different way, focusing on a recent pickup truck and importing additional expense vehicles.

Pretax profits in North America rose 13% to $3.98 billion, while losses narrowed to $435 million at the troubled Cruise autonomous vehicle unit. Cruise lost its license to run robotaxis in California after a San Francisco crash last year. The unit has resumed testing with human safety drivers in three markets and driverless testing in Houston.

The third-quarter act allowed GM to raise the low complete of its packed-year net returns guidance, but it lowered the top complete of the range. The business now expects to make $10.4 billion to $11.1 billion, compared with $10 billion to $11.4 billion previously.

Jacobson said next year should be much like this one and Barra said the business would provide specific 2025 guidance in January.

The business did point to lower returns in the fourth quarter. Jacobson said GM pulled ahead some truck and SUV production from the fourth quarter that added $400 million to pretax returns. The increased production will make up for eight days of lost production around the holidays in November and December, he said.

In the fourth quarter, GM won’t view gains from worth increases that came during the same quarter last year, he said.

GM also saw a $700 million boost in warranty costs, which Jacobson blamed on expense boost in parts and labor costs to fix the problems. He said there were problems with older models that have been fixed in production.

GM said it sold 32,000 electric vehicles during the quarter, with discounts that were 11 percentage points below the industry average. Barra said in a note to shareholders that GM continues to make advancement toward EV profitability. The business expects to produce 200,000 of them this year.

“We’re seeing demand commence to inflect a little bit higher as we’re building awareness out there for the products,” Jacobson said.

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AP Business Writer Stan Choe contributed to this update from recent York.