General Motors Co.’s second-quarter profit beat analysts’ estimates as the largest U.S. car and pickup maker is boosting growth with the one of the biggest waves of new models in its history. Profit excluding one-time items was 84 cents a share, GM said, exceeding the 77-cent average of 13 estimates compiled by Bloomberg. That compares with 90 cents a share a year earlier. GM rose 1.6% to $37.75 at 9:08 a.m. New York time in pre-trading hours.
Demand for pickup trucks in the U.S. as well as Cadillacs and Buicks in China boosted revenue by 3.9%. The growth for GM, along with Ford Motor Co. and Chrysler Group LLC, is further evidence of the industry’s sustainability even after Detroit this month filed the largest municipal bankruptcy in U.S. history.
“We’re just at the very beginning of our new launch cycle here, a lot of the new product is yet to really come into the market at full run rate,” Chief Financial Officer Dan Ammann told reporters today at the company’s Detroit headquarters, Bloomberg cited.
The upgraded designs of Chevrolet Corvette and Silverado are among 18 new or refreshed GM vehicles being presented in U.S. market this year. The climb will transform GM’s lineup into one of the newest in the industry from one of the oldest. One of the earliest new offerings, the 2014 Impala, was rated by Consumer Reports today as the best sedan on the market being the first for a U.S. automaker in at least 20 years. GM’s pickup growth was in line with the gain posted by Ford’s F-Series, the market’s top-selling line of vehicles. The high-volume F-150 is due for a redesign next year.
Goldman Sachs last week switched GM and Ford on its Americas Conviction Buy list and projected that the largest U.S. automaker’s shares may rise to $45 in the next year from $37.14 at yesterday’s close. Patrick Archambault, a New York-based auto analyst for Goldman Sachs, said the new pickups will boost GM’s profit margins and that the automaker may pay a dividend by the end of the year. “We see GM as one of the most attractive product stories in the sector,” he wrote cited by Bloomberg.
General Motors returned to the Standard & Poor’s 500 Index during the second quarter, a milestone triggered in part by the U.S. Treasury reducing its stake in the automaker. GM said in December that the U.S. planned to exit its holding within 15 months.
Shares of the automaker advanced 0.43% in yesterdays trade while being up almost 30% year-to-date.
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