General Motors on Tuesday reported a higher-than-expected quarterly profit, raised by revaluations of shares it owns in ride-hailing company Lyft Inc and France’s Peugeot SA.
Excluding the advantages of those revaluations, GM provided outcomes in line with analyst predictions, driven mainly by highly lucrative pickup truck sales in the U.S. market.
The earnings came after a 7 percent reduction in U.S. new-vehicle sales in the first quarter, in which smaller competitor Fiat Chrysler Automobiles NV’s pickup trucks outsold GM’s.
“We remain concerned with the U.S. auto cycle, both from a pricing and volume perspective,” Buckingham Research analyst Joseph Amaturo wrote in a client note. “Moreover, specific to the automaker, we are concerned about recently monthly pick-up truck and market share stats.”
GM’s sales in China also dropped nearly 20 percent and profit there decreased 37 percent. Auto sales in China industry-wide dropped 2.8 percent last year and dropped again in the first quarter.
GM Chief Financial Officer Dhivya Suryadevara informed reporters that the Chinese industry remains “volatile.”
“From an economic standpoint, there are green shoots,” she stated. “But we have yet to see that translate to auto demand.”
GM will introduce 20 new models in China in this year, most of them in the second half of the year.
In the United States, GM had about four months supply of its Chevrolet Silverado pickup truck on the ground as of the starting of April, a high level in an auto market that overall is anticipated to reduce in this year.
GM reported a first-quarter net profit of $2.2 billion, or $1.48 per share, increasing from $1.05 billion, or 72 cents each share, a year ago.
The company’s revenue for the quarter dropped to $34.9 billion from $36.1 billion a year ago.