While the uncertainty created by the dragged out presidential election might be dominating the headlines, General Motors had some good news of its own Thursday morning as it reported solid earnings of $4 billion for the third quarter, reflecting the rebound of the U.S. automotive market.
The numbers jumped to $5.3 billion on an EPS-adjusted basis, or $2.83 a share. That was substantially ahead of the $1.38 a share estimate of Wall Street analysts, according to tracking firm Refinitive.
Revenue, meanwhile, fell a hair short of forecasts, at $35.48 billion. The consensus number was $35.51 billion. But even then, that was a significant rebound by the nation’s largest domestic automaker compared to its weak performance during the April-June quarter.
GM’s former Chief Financial Officer Dhivya Suryadevara previously signaled the company would show some positive momentum during the second quarter earnings call, and the latest numbers back that up.
CEO Mary Barra is expected to provide context on the third-quarter results, while offering thoughts about the rest of the year, during an earnings call later today.
But industry observers are expecting to see momentum continue to build as troubled 2020 comes to a close and GM moves into the 2021 model year.
“Observers of General Motors should certainly be very optimistic,” Nick Shields, senior analyst at Third Bridge in New York, said shortly before the Q3 numbers were revealed. “Lots of macro indicators show that auto demand has recovered robustly since the plant shutdowns back at the start of the pandemic, both on the new and used side of the industry, as industry experts we speak to suggest new car volumes could hit 16 million units this year, which is great considering everything the OEMs went through this year.”
GM’s solid earnings come a week after Fiat Chrysler and Ford also reported good numbers for the July-September period. Ford had what Shields described as a “monster quarter,” reflecting the launch of critical new products that will boost demand going into 2021, such as the new F-150 pickup, the Bronco Sport SUV and the long-range Mustang Mach-E SUV.
GM has fewer significant launches going into the new model year, though it will follow in 2021 and 2022 with an assortment of all-electric vehicles, such as the GMC Hummer pickup, the Chevrolet Bolt EUV and the Cadillac Lyriq SUV.
Wall Street, in early trading, appears to be welcoming GM’s Q3 news, and the automaker could use a boost. Its shares are down about 3% year-over-year, though it did get a 16.7% bump in October.