America’s largest automaker posted earnings of $ 4.1 billion, excluding specialty items, up from $ 2.5 billion on that basis a year earlier. It’s much better than the $ 2.1 billion that analysts had forecast – and up 64% from the earnings GM announced in the third quarter a year ago.
But demand there has driven the average prices of vehicles higher, allowing GM to maintain steady sales.
John Stapleton, GM̵7;s Interim CFO said: “Sales in the US and China are recovering faster than many would expect and GM is benefiting from strong customer demand for categories. our new vehicles and services, especially our pickup trucks and full-size SUVs ”.
But the real improvement came from the company’s margins, which rose to 14.9%, up from 8.4% a year ago.
CEO Mary Barra said that if the current rebound continues, GM will likely continue to pay dividends in mid-2021.
“We know this is a high priority for our shareholders,” she said in a call with analysts.
But the company is still relatively cash-rich. It generated $ 9.1 billion cash flow from its auto operations during the quarter, leaving auto operations with $ 30.2 billion in cash at the end of the quarter, up from $ 17.3 billion on the beginning of the year, before Covid-19 disrupted the economy.
And that cash generation is giving GM the cash it needs to invest in factories and new products, such as electric cars.
“Our North American business, and in particular the strength of a full-size truck platform … and full-size SUVs, provide us with an excellent opportunity to self-finance her development in [electric vehicles]”, Says Barra.
“We operated our large pickup plants around the clock to meet particularly strong demand for Chevrolet Silverado and GMC Sierra in the US and Canada,” says Barra. “When the plant is back up and running in early 2022, we will see a significant increase in our production capacity of full-size pickup trucks.”