Categories Earnings

Strikes force General Motors to slash guidance

Amidst the workers strike and the continuing weakness in China, General Motors (NYSE: GM) reported a dip in revenues and income for the third quarter. The results, however, were better than what the street had anticipated.

Meanwhile, the company was forced to lower its fiscal year guidance, hurt by the 40-day strike by the United Auto Workers union.

General Motors Q3 2019 earnings results.

Revenues fell 1% to $35.5 billion, exceeding the street consensus of $33.82 billion. Meanwhile, adjusted net income of $1.72 per share was above the average analysts’ estimate of  $1.31 per share.

The carmaker lowered its adjusted EPS guidance for fiscal 2019 to a range of $4.50 – $4.80, from the earlier estimate of $6.50 – $7.00. Outlook on adjusted automotive free cash flow was also slashed to $0-1 billion, from the earlier target of $4.5-6 billion.

GM shares gained 1% immediately following the announcement.

“The work stoppage in the U.S. negatively affected North American business results in the third quarter and expected results for the year. In the third quarter, about two weeks of vehicle production was lost,” the company said in a statement.

READ: Corning Incorporated (GLW): Q3 2019 Earnings Snapshot

The management expects to improve profitability, going forward, through the effective execution of its cost reduction program. The ongoing workers’ strike and the continuing weakness in China, where the company is planning to launch several new models this year, are the main issues facing it right now.

Earlier this week, Tesla (TSLA) surprised the market by reporting profit for the third quarter, contrary to expectations for negative earnings. Profit came in at $1.91 per share on revenues of $6.3 billion. Ford Motor Company (F) posted stronger-than-expected earnings of $0.34 per share for the third quarter, despite a 2% decline in sales.

Shares of General Motors had a  positive start to 2019 but witnessed high volatility in recent months. The stock gained 6% since the beginning of the year and 11% in the past twelve months.

Get access to timely and accurate verbatim transcripts that are published within hours of the event.

Most Popular

Should investors worry about Micron’s (MU) weak Q4 results and guidance?

The semiconductor industry is a rapidly growing business segment that currently thrives on the digital transformation wave. The demand for memory chips and other semiconductor products increased over the years,

What has Bed Bath & Beyond (BBBY) outlined for this fiscal year?

Shares of Bed Bath & Beyond (NASDAQ: BBBY) were up on Friday, a day after the company delivered disappointing results for the second quarter of 2022. The company reported a

NKE Earnings: Highlights of Nike’s Q1 2023 results

Nike, Inc. (NYSE: NKE) has reported a decrease in net profit for the first quarter of 2023, despite a modest increase in revenues. The company's stock suffered a big loss

Add Comment
Viewing Highlight