GM blows away expectations as SUV boom continues to drive profits (gm)
REUTERS/Rick Wilking
General Motors reported first-quarter 2016 earnings on Thursday, and they were a beat: the automaker earned $1.26 per share.
Net revenue was $37.3 billion for the quarter, versus $35.7 a year ago.
Analysts had expected $1.01 per share, an improvement over $0.86 a share in the same quarter last year.
“The quarter was a great start to a year in which we anticipate strong growth in earnings and free cash flow," said GM CFO Chuck Stevens in a statement.
GM is the market-share leader in the US and has a strong position in China, the world's largest auto market.
In the US, profits are being driven by robust demand for pickup trucks and SUVs, as gas prices remain low and credit readily available.
In the 2015, the US market set a record for sales, as 17.5 million new cars and trucks rolled off dealer lots.
Globally, GM sold 2.36 million vehicles in the first quarter.
In a conference call with reporters after earnings were released, Stevens expressed confidence in GM's future position in more difficult markets, such as Latin America and Europe.
"We have a dominant position in Latin America," he said. "That’s a place we want to play. We think there’s money to made there."
He also reminded reporters that GM is preparing for what he called a "product offensive" in Europe, aiming for 8% market share in that region.
On balance, GM is striving to ease its dependence on the strong US market by positioning itself to be profitable elsewhere when, as Stevens said, the cycle turns.
GM shares rose 3.6%, to $33 in pre-market trading on Thursday.
REUTERS/Rick Wilking
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