General Motors Co. on Tuesday said it made $3.3 billion in net income in the third quarter, up from 2021’s third quarter profits of $2.4 billion despite a tight supply inventory still hindering sales and lessening demand amid economic uncertainty.
GM’s revenue was $42 billion in the quarter, up from the $27 billion the company made in the same three months last year.
The results beat investor expectations.
“This morning GM delivered solid 3Q results despite a very difficult supply chain environment and should be digested well by investors,” Wedbush Securities analyst Dan Ives said in a Tuesday note. “Total revenue of $41.9 billion was roughly in-line with the Street while impressively Adjusted EBIT was $4.3 billion vs the Street at $3.7 billion.”
Ives said in a statement to The Detroit News that the earnings report “is a major step in the right direction for GM with momentum heading into 2023. Profitability was much better than expected by the Street and the EV vision is primed for a breakout year in 2023.”
Wall Street reacted favorably to the automaker’s earnings report, with GM stock up nearly 2.5% in midmorning trading in New York.
The Detroit automaker is still aiming to meet its projected guidance of net income between $9.6 billion and $11.2 billion, and adjusted pre-tax earnings of between $13 billion and $15 billion for the year. For the year so far, GM has made $7.9 billion, down fromthe $8.3 billion it had this time last year.
“We’re delivering on our commitments and affirming our full-year guidance despite a challenging environment because demand continues to be strong for GM products and we are actively managing the headwinds we face,” GM CEO Mary Barra wrote in a letter to shareholders on Tuesday.
On a call with media Tuesday, GM Chief Financial Officer Paul Jacobson said the company hasn’t seen “any direct impact on our products” from economic headwinds. GM’s average transaction price was $51,911 in the third quarter, according to Cox Automotive. By comparison, the automaker’s ATP was $40,053 in the third quarter of 2017.
“Pricing remains strong, demand remains strong for our products, but we can’t ignore what others are saying out there and what others are seeing out there, so we’re going to continue to be agile with both our cost investments as well as as our production,” he said.
Earlier this month, GM reported its U.S. dealers sold 555,580 vehicles in the third quarter, up 24% from last year as inventory levels improved and demand remained strong despite rising interest rates.
GM’s net income margin for the quarter was 7.9%. Pre-tax earnings in GM North America totaled $3.9 billion in the quarter. GM International’s pre-tax earnings were $334 million.
Ford Motor Co. reports its third-quarter earnings Oct. 25. Stellantis NV, maker of Ram trucks and Jeeps, will release its shipments and revenues Nov. 3.
khall@detroitnews.com
Twitter: @bykaleahall