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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