On Tuesday, shares of General Motors Company (GM stock) were trending higher after the automotive company reported that it had easily surpassed profit expectations for the most recent quarter. Executives of the company also discussed some supply-chain improvements despite operating in an environment described as “challenging.”
GM Stock Price
The firm reported a net income for the third quarter of $3.31 billion, or $2.25 per share, which is an increase over the net income reported for the same period in the preceding year of $2.42 billion, or $1.62 per share. GM (NYSE:GM), also earned $2.25 per share on an adjusted basis, which is an increase from $1.52 per share in the previous year, despite the fact that analysts tracked by FactSet were expecting $1.88 per share.
The Chief Executive Officer of GM (NYSE:GM), Mary Barra, mentioned on the company’s earnings call that the company had finished and shipped out almost 75% of the unfinished vehicles it had in its inventory back in June. This achievement for the company exceeded its plans as “gradual” improvements to the supply chain became apparent.
On the results conference, Barra stated that “short-term disruptions will continue to arise,” but that the company is “taking tangible efforts” to reduce the effects of these disruptions and establish “long-term resiliency.” “This comprises a number of different strategic supply agreements for mature nodes, which are the areas with the largest supply constraints. In addition, we are working directly with semiconductor suppliers to establish long-term predictions, boosting transparency and ensuring that their planning cycles will incorporate our volume.
Paul Jacobson, GM’s Chief Financial Officer, noted that the business is watching dealer and inventory patterns in order to achieve the appropriate balance between supply and demand as production levels at the company continue to increase.
“The number of automobiles physically on dealer lots is considerably below historical levels and continues to remain tight at approximately 20 days,” he added. “Historically speaking, the average number of days a dealer has to sell a vehicle is around 20.” “It is extremely important to note that the demand for our projects with the best margins and the quickest turn times has remained robust.”
Compared to the previous year’s total of $26.78 billion, GM’s revenue increased to a whopping $41.89 billion. The consensus estimate among the analysts tracked by FactSet was 42.09 billion dollars.
Executives indicated in the earnings statement that they were confirming their full-year estimate, which calls for net income between $9.6 billion and $11.2 billion and adjusted earnings per share between $6.50 and $7.50.
In a letter to the company’s shareholders, Barra explained that “we are delivering on our commitments and affirming our full-year guidance despite a challenging environment” This is because “demand continues to be strong for GM (NYSE:GM) products and we are actively managing the headwinds we face.”
GM (NYSE:GM) has plans to raise manufacturing of the Chevrolet Bolt electric vehicle and Bolt extended-range utility vehicle to 70,000 units in 2019, up from 44,000 units this year. According to the shareholder letter, the firm plans to discuss “the rapid growth” of its electric-vehicle business during the investor day that will take place on November 17.
Featured Image: Megapixl © Jetcityimage
Author Faith Yakubu 
