General Motors the Only Detroit Auto Maker to Post a Profit--Update
06 Maio 2020 - 01:37PM
Dow Jones News
By Mike Colias
General Motors Co. reported a $292 million net profit in the
first quarter, despite a big hit from Covid-19 fallout, as strong
pickup-trucks sales and restructuring before the crisis helped it
avoid quarterly losses suffered by its Detroit rivals.
GM said on Wednesday its pretax profit, excluding one-time
items, was $1.25 billion for the first quarter, down 46% from the
previous-year period. The company cited a $1.4 billion impact from
the pandemic, which forced the closure of factories in China for
much of the quarter, as well as about 10 days of downtime in North
America.
Pretax earnings per share was 62 cents, better than analysts'
estimate of 40 cents per share, according to FactSet.
The company said earnings-per-share were reduced by 28 cents
because of lower values of its stakes in ride-hailing firm Lyft
Inc. and French auto maker PSA Group.
The auto maker said its net income results were hurt by
restructuring costs in Australia and Thailand. Revenue fell 6% to
$32.7 billion. GM swung to a $167 million loss in China, from a
$376 million profit a year earlier.
GM shares rose about 3% in premarket trading Wednesday.
GM's pretax profit in North America -- one of its largest sales
regions -- rose 16% to $2.2 billion amid sharply higher sales of
large pickup trucks and sport-utility vehicles. The company closed
its roughly three dozen U.S. factories around March 20 amid the
worsening U.S. Covid-19 outbreak.
The company added it is working with the United Auto Workers
union on factory safety protocols and is targeting a May 18 restart
date for the majority of its manufacturing operations in the U.S.
and Canada. The Wall Street Journal had previously reported the
reopening timeline.
GM was the only Detroit car company to report a profit for the
first quarter.
Ford Motor Co. last week posted a net loss of about $2 billion
for the same January-March period, hurt by both the pandemic and
restructuring costs. Fiat Chrysler Automobiles NV on Tuesday
reported a loss of EUR1.7 billion ($ billion) for the period.
GM said sales of its large pickup trucks -- the Chevrolet
Silverado and GMC Sierra -- rose 27% during the quarter, even as
overall U.S. sales slid 7%. GM's traditional truck strongholds,
including parts of the South and Midwest, were less affected by
stay-at-home orders, finance chief Dhivya Suryadevara said.
"Truck is our strong suit, and that is something we're going to
capitalize on as we restart" the factories, Ms. Suryadevara said
during a media briefing.
GM said it ended March with $33.4 billion in liquidity, which
included about $16 billion from a credit line it drew in March.
Analysts have said the company should have enough of a cash cushion
to last through the third quarter even if production remains
severely limited.
Detroit's auto makers are in better shape than they were heading
into the global financial crisis in 2009, which left GM and Fiat
Chrysler bankrupt and had Ford teetering. Still, their
first-quarter financial results show how quickly cash can evaporate
when production shuts off almost overnight, forcing them to
conserve cash in part by delaying or scrapping high-profile model
launches.
The companies have been racing to bolster their cash cushions
since the Covid-19 outbreak idled their North American factories,
starting around March 20. GM, Ford and Fiat Chrysler collectively
have added more than $45 billion in cash to their balance sheets,
through issuing fresh debt or drawing on credit lines. Ford and GM
both nixed their dividends, each saving at least $2 billion
annually.
Still, company executives say they are tightening budgets and
trying to trim costs where possible, expecting the second quarter
will be even tougher than the first.
Ford last week canceled plans to develop an all-electric Lincoln
SUV with startup Rivian Automotive. It also postponed the reveal of
its first new Bronco sport-utility vehicle since the mid-1990s and
cited a potential delay in the first redesign in six years of its
F-150 pickup truck, the company's biggest moneymaker.
GM has pushed back some vehicle programs, postponed plans to
reveal an electric Hummer SUV and pulled the plug on its fledgling
car-sharing unit, Maven. Ms. Suryadevara said investments in
electric and autonomous vehicles would remain on track.
Fiat Chrysler said it has built in a three-month delay for many
vehicle launches but hasn't canceled any, the company said.
Write to Mike Colias at Mike.Colias@wsj.com
(END) Dow Jones Newswires
May 06, 2020 12:22 ET (16:22 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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