General Motors reported better than expected results for the third quarter this, beating analysts’ estimates.

General Motors Co. reported third quarter earnings Tuesday that despite a $3-billion hit due to the UAW strike, still beat analysts’ expectations.

The automaker posted third-quarter net income of $2.3 billion, or $1.60 a share, down from $2.5 billion, or $1.75 a share, a year earlier. It jumps to $1.72 a share when excluding one-time items. Analysts predicted earnings of $1.31, on average, according to from Refinitiv.

Meanwhile, the company’s revenue fell a bit to $35.47 billion from $35.79 billion, which also bested analysts’ estimates of $33.82 billion.

(Daimler AG Ekes Out Q3 Earnings, Sales Increases)

“Our underlying third-quarter performance demonstrates the ongoing resilience and earnings power of our company, building on our leading truck and crossover franchises, and transformational cost actions,” said Chief Financial Officer Dhivya Suryadevara. “Our focus going forward will continue to be the disciplined execution of our business plan.”

The 40-day UAW strike cost GM $3 billion. The company also lost 300,000 units of vehicle production.

The biggest impact on GM’s performance was the 40-day walkout by its 48,000 United Auto Workers members. It was the longest strike at a U.S. automaker since 1970. The new deal netted workers $9 billion in new work, but also allowed the automaker to close four plants in the U.S., including the oft-debated site in Lordstown, Ohio.

GM said the strike by the UAW cost it $1 billion in pre-tax profits during the quarter, or 52 cents per share. Suryadevara noted the company lost around 300,000 units of vehicle production during the walkout and will not be able to recover most of that loss in 2019.

Oveall, the full-year impact of the strike would be around $2 per share, or around $3 billion, the company noted. GM now expects full-year adjusted earnings per share between $4.50 to $4.80, down from its previous forecast of $6.50 to $7 per share.

(Tesla Offers Investors a Third Quarter Surprise — A Profit)

The company said it now expected full-year adjusted automotive free cash flow in a range from zero to $1 billion, down from its previous forecast of $4.5 billion to $6 billion. GM’s adjusted automotive free cash flow stood at $2.4 billion at the end of the third quarter. The strike reduced cash flow for the year by about $5.5 billion, Reuters reported.

GM projected its 2019 capital expenditures will be about $7.5 billion, down from its previous guidance of $8 billion to $9 billion. Suryadevara said no plans were cut and the lower spend was due to operating efficiencies.

GM sales rose in the third quarter, helping it beat earnings expectations, due to strong sales of its popular pickups.

Total liquidity stood at $37.2 billion, up $3.4 billion versus year-end 2018, and up $3.2 billion compared to the second quarter of 2019. GM will provide more detailed forecasts for 2020 early next year, but Suryadevara said one expected 2020 challenge will likely be lower U.S. industry sales.

Sales were a bright spot for the company during the third quarter as it reported a 6% increase, led by its full-size pickup trucks, SUVs and crossovers. Those highly profitable vehicles pushed its profit margin to almost 11% in North America. The results appeared to please investors as the company’s stock finished up 4.28% on the day.

(Ford Sees Profits Fall by More Than Half in Third Quarter)

“The company said it expects the negative impact of the strike on full-year earnings to be about $2.00/share. As for the earnings beat, we believe analysts overestimated the negative impact the strike would have on Q3 results,” wrote CFRA Analyst Garrett Nelson in a research note. “We raise our opinion to Hold as the stock’s 4.0% dividend yield should help provide support, but continue to see daunting competitive headwinds and view Cruise as overvalued.”

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