GM withdraws guidance over car attacks
GM shares were largely unchanged Tuesday after the company reported third-quarter results.
Pras Subramanian from Yahoo Finance reports:
Against the backdrop of difficult contract talks with the United Auto Workers (UAW), GM (GM) on Tuesday announced growth in third-quarter revenue and earnings, but withdrew its 2023 guidance on uncertainty over labor strikes.
GM Chief Financial Officer Paul Jacobson said the company was withdrawing previously announced earnings guidance of $12 billion to $14 billion in EBIT (earnings before interest expense and taxes) and net income attributable to shareholders of $9.3 billion to $10 billion. $7 billion.
In the third quarter, GM reported revenue of $44.13 billion (versus an estimate of $43.01 billion), up 5.4% from a year earlier. In terms of profitability, GM reported adjusted EPS of $2.28 per share (vs. $1.84 expected) on net income of $3.06 billion.
Jacobson also said the labor strikes that began in mid-September cost the automaker about $800 million in pre-tax profits due to lost vehicle production, including $200 million in the third quarter.
In addition to strikes at GM plants in Wentzville, Missouri, and Lansing, Michigan, the UAW is striking all GM parts and distribution centers, crippling automakers’ ability to service customer cars and deliver parts to other assembly plants. The UAW expanded its labor strikes at GM rival Stellantis on Monday morning, pulling more than 6,000 workers from its highly profitable Ram truck plant in Sterling Heights, Michigan.
Earlier this month, GM indicated it could miss third-quarter profits by $200 million because of the ongoing strike. JPMorgan analyst Ryan Brinkman estimated that GM is likely losing $21 million a day due to plant and parts distribution center closures.
GM is also moderating investments in electric vehicles. Last week, GM said it was delaying its EV truck expansion, pushing back its EV truck plant conversion to late 2025 to “better manage capital investments while adapting to changing demand for electric vehicles.”
“We are also moderating an acceleration of electric vehicle production in North America to protect our prices, adapt to slower demand growth in the near future, and implement engineering efficiencies and other improvements that will make it cheaper and more profitable to produce our vehicles,” he added. CEO Mary Barra said in her letter to shareholders.
#Stocks #Rise #Flood #Profits #Todays #Stock #Market #News
Image Source : finance.yahoo.com