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General Motors reported first-quarter earnings and revenue that beat analysts’ expectations on Tuesday, fueled by strong sales of crossovers, particularly in North America.
In both the U.S. and China, sales of new crossovers doubled over the same quarter last year.
Here’s how the company did compared with what Wall Street expected:
- Earnings: $1.43 per share, adjusted vs. $1.24 per share forecast by Thomson Reuters
- Revenue: $36.1 billion vs. $34.66 billion forecast by Thomson Reuters
However, net income tumbled to $1.05 billion, or 77 cents per share, from $2.61 billion, or $1.75 per share, a year ago, hurt by a $900 million charge to restructure its business in South Korea.
GM reached a deal with a Korean labor union on Thursday that will allow the automaker to remain in the country and save the company $400-$500 million per year in costs, CFO Chuck Stevens said on a call with reporters.
The automaker also reached a preliminary deal with a state-owned Korean bank to secure $750 million in funding.
On an adjusted basis, the company earned $1.43 a share, which was better than $1.24 per share analysts were expecting, according to Thomson Reuters.
Revenue fell 3.1 percent to $36.1 billion.
GM delivered 715,794 vehicles in the U.S. during the first quarter, up 4 percent, and ahead of an estimated industry increase of about 2 percent.
“Results this quarter were in line with our expectations with planned, lower production in North
America related to the transition to our all-new Chevrolet Silverado and GMC Sierra,” said Chairman and CEO Mary Barra, in a statement. “We are on plan to deliver another strong year in 2018.”
The largest U.S. automaker has been cutting shifts at some factories that make passenger cars, such as its plant in Lordstown, Ohio, which makes the compact Chevrolet Cruze sedan. At the same time, it has added a shift at its Spring Hill assembly plant in Tennessee, to meet demand for the GMC Acadia and Cadillac XT5 crossovers.
SUVs and trucks went from less than 50 percent of the U.S. market in 2008 to a 65 percent share at the end of 2017 and are expected to further grow in popularity, according to LMC Automotive.
Some changes among executive ranks are happening as well. The president of GM’s luxury brand Cadillac Johan de Nysschen was abruptly replaced in mid-April by GM Canada executive Steve Carlisle. Cadillac has lagged other brands in the SUV and crossover segments, which has been a source of frustration for some dealers. Cadillac plans to release its third SUV, the XT4, in late 2018.