General Motors on Friday posted a record post-bankruptcy first-quarter profit as the No. 1 automaker benefited from a shift to larger SUVs, crossovers, and trucks despite the industry-wide trend of declining sales.
GM’s profits soared 33% during the first three months of the year to $2.6 billion, up from $1.93 billion a year ago. Earnings per share of $1.70 per share easily beat Wall Street’s expectations of $1.48 per share.
The company also said its global revenue increased 10.6% to $41.2 billion and pretax margin profit rose to 8.2%, an improvement of 1.1 percentage points from a year earlier.
“Our first-quarter results reflect our resolve to grow profitably and demonstrate the strong earnings power of this company,” CEO Mary Barra said in a news release. “More importantly, we advanced our strategic plan to transform GM for the long term and unlock more value for our shareholders.”
GM cited the sale of its Opel and Vauxhaul brands to PSA Groupe for $2.2 billion, which is expected to improve its performance in Europe, where it lost $200 million in the first quarter.
“For GM, the sale is another step in our ongoing work to transform the company by strengthening our core business, investing resources in higher return opportunities, including personal mobility, and returning significant capital to our shareholders,” Barra said.
According to Reuters, GM’s first-quarter results “underscore a shift where U.S. consumers are favoring larger SUVs, crossovers and trucks, instead of cars.” U.S. sales of Chevrolet trucks and crossovers rose 3.5% and 12%, respectively, during the quarter, while GMC truck and crossover sales jumped almost 10%.
No. 2 U.S. automaker Ford Motor on Thursday reported lower quarterly net profit due to higher commodity, engineering and recall costs, and a drop in vehicle sales.
Brian Johnson, an analyst for Barclays, said investors continue to be worried about expectations that industry sales will fall in the U.S. and GM’s profits will suffer as it deals with bloated inventory. “We believe GM deserves to be better rewarded for overall strong results and execution,” he told the Detroit Free Press.