General Motors report updates on Quarterly Net Loss after Sale of Opel to Peugeot

Detroit — General Motors posted a quarterly net loss on Tuesday due to charges stemming from the sale of its Opel unit in Europe to France’s Peugeot, but, excluding charges, its results handily beat analyst expectations and the company re-affirmed its full-year earnings outlook.

The results sent the company’s shares up more than 2% in pre-market trading.

The number one US vehicle maker posted lower revenue for the quarter as it shuttered plants in North America to reduce production and tackle bloated inventory levels, especially of unpopular sedan models as consumers move increasingly to pick-up trucks, SUVs and crossovers.
GM had 76 days’ supply of unsold vehicles at the end of September, down from 88 days a month earlier and more than 100 in the summer. The company’s wholesale volumes were down 26% compared to the same quarter in 2016.

GM said on Tuesday it was on track to meet its goal of 70 days’ supply of vehicles in US by the end of the year. But as GM embarked on a months-long process to trim excess supply, it relied heavily on consumer discounts to sell vehicles. Discounts as a percentage of the average transaction price totaled 13.7%, slightly above the industry average.

Anything higher than 10% is considered unhealthy for vehicle re-sale values and unhealthy for car makers in the long term.

The company said that all its units were profitable for the first time since the fourth quarter of 2014.
GM posted a third-quarter net loss of $2.98bn, or $2.03 per share, compared with a profit of $2.77bn, or $1.71 per share a year earlier. Excluding discontinued operations, GM posted a net profit of 8c per share.

Excluding one-time charges, the company earned $1.32 a share, above analyst expectations of $1.14. In pre-market trading, GM shares were up 2.8% at $46.41.

Reuters