Shares of General Motors (NYSE:GM) moved up nearly 1.30% before sinking 1.44% into the red in pre-market trading after the Detroit automaker reported its 3Q earnings results Tuesday morning, while in the midst of ongoing labor strikes by the United Auto Workers union.
The automaker reported a top line beat with adjusted earnings coming in at $2.28 versus the street’s $1.88 estimate, while revenue came in at $44.1 billion, ahead of the consensus estimate of $42.62B.
"In the U.S., our strong sales, healthy ATPs (average transaction prices) and essentially flat incentives helped us outperform the industry and gain market share," GM CFO Paul Jacobson told reporters during a conference call.
However, according to Jacobson, the labor strikes, which started Sept. 15, have led to an $800 million pre-tax earnings loss for the automaker due to decreased vehicle production, with $200 million lost in the third quarter alone.
Due to the ongoing volatility caused by the strikes, GM is retracting its earlier earnings projection for the year, which anticipated earnings of $12B to $14B and net income of $9.3B to $10.7B for shareholders.
Also, given uncertainty in the economy and car market, GM plans to continue searching for areas to cut costs and will moderate its future electric vehicle production to match demand, which is not as strong as GM had originally forecasted.
"We are reducing our fixed costs by $2 billion net of depreciation and amortization as we exit 2024," CEO Mary Barra told shareholders in a letter early Tuesday.
"We are also moderating the acceleration of EV production in North America to protect our pricing,” she added.
GM, last week, revealed that the company will, for one year, postpone the production of their Chevrolet Silverado EV and GMC Sierra EV pickups at the Orion Assembly plant. The delay was attributed to slowing consumer demand for EVs.
"Let me be clear though, our commitment to an all-EV future is as strong as ever and we continue to plan EV capacity of one million units in North America as we exit 2025," Jacobson said.
As of this writing, shares of GM are down 1.10% in pre-market trading Tuesday morning.