GM surpasses expectations in Q3, shares surge amid strong consumer demand

GM said strong consumer demand for its trucks and SUVs helped propel stronger-than-expected results for third quarter. The automaker's shares shot up 8% in early trading on Tuesday to a two and a half year high of USD 53.25. Resilient consumer behavior 'has certainly helped us in the area of performance,' said Chief Financial Officer Paul Jacobson. But he said he was hopeful that the next year would be better, as financing rates are set to start falling.

GM gave investors a reassuring update on their possible fears that industry profits will slip on higher interest rates, lifting its pretax profit outlook for 2024. Strong pricing and consumer spending helped lift the company's pretax profit estimate to between USD 14 billion and USD 15 billion, up from mid-year forecasts of between USD 13 billion and USD 15 billion.

The earnings per share adjusted for costs amounted to USD 2.96 for Q1, leading the Street to expect that it touched USD 2.43. Earnings also beat out estimates, coming to USD 48.8 billion amid expectations for USD 44.6 billion. Mary Barra, CEO, said GM's profits for next year are expected to be similar to those seen this year.

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In China, where GM's loss in the first half was USD 210 million and another USD 137 million in the third quarter, the company is pressing ahead with plans to restructure its operations there. In the fourth quarter, shareholder and joint venture board meetings will take place, said Barra, to deal with these issues.

GM's stock has gained 36 percent this year versus rivals including Ford and Stellantis, which have had their own problems. In North America, Stellantis has so far struggled to raise profits after raising prices and cutting incentives, while Ford continues to wrestle with costly quality issues.

Overall, GM's strong quarterly performance underscores its adaptability in a fluctuating market and positions the company favorably for the future.