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.
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.
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.