General Motors reported a slight dip in quarterly revenue but strong sales of its high-margin pickup trucks, SUVs and crossovers, complemented by cost discipline, pushed it to an earnings beat.
For the second quarter, GM said its overall sales fell 1.9% to $36.1 billion but it posted net income of $2.4 billion, up 1.6% from the same period a year ago.
Excluding items, the company earned $1.64 per share, easily beating analysts’ estimates of $1.44 per share. “Virtually all of the No. 1 U.S. automaker’s profit came from North America, where it posted a profit margin of 10.7%,” Reuters reported.
GM also saved $700 million during the second quarter through its restructuring efforts and $1.1 billion for the first half of the year that included plans to cut 15,000 jobs and end production at five North American plants.
“Our results demonstrate the earnings power of our full-size truck franchise, with more upside to come,” CEO Mary Barra said in a news release. “We will continue operating our business with discipline, and the vision needed to deliver a stronger future for our employees, customers and shareholders.”
GM’s bottom line has been benefiting from its pricey new pickups. Sales of the Chevrolet Silverado 1500 crew cab and GMC Sierra 1500 crew cab, which were introduced last summer, were both up 12% in the second quarter.
In the crossover segment, the Chevrolet Equinox and Traverse delivered record sales gains of 16% and 6%, respectively.
GM executives are expecting a strong second half to the year as the rollout of Chevrolet Silverado and GMC Sierra trucks continues. “Things are looking up for the company for the back half of the year, with the Silverado and Blazer starting to pick up steam,” said Jeremy Acevedo, Edmunds’ senior manager of insights.
First-quarter sales of the 2019 Chevrolet Silverado and GMC Sierra light-duty crew cabs were up 20% year over year, with average transaction prices up $5,800. Overall, average transaction prices rose by $1,575 to a second-quarter record of $37,126 versus the industry standard of $33,681.