General Motors Company (GM) shares have extended their rally for the second-straight day on Friday following better-than-expected financial performance for the third quarter, as sales in the United State and China bounced back faster than expectations.
The Detroit, Michigan-based company posted earnings of $4.05 billion, or $2.78 per share for the quarter, significantly higher than $2.35 billion, or $1.60 per share in the same period last year. On an adjusted basis, profit was $2.83 per share, easily beating analysts’ average estimate of $1.38 per share.
Revenue for the quarter came in at $35.48 billion, slightly higher than $35.47 billion in the comparable period, one year ago. Analysts surveyed by FactSet had forecast of $35.43 billion.
Speaking on the quarterly performance, the company’s interim CFO John Stapleton said sales in the United States and China is rebounding faster than many expected, and GM is taking advantage of strong demand for its new vehicles, particularly for its full-size trucks and SUVs.
GM revenue from China rose 12 percent in the quarter on year-over-year basis.
Goldman Sachs analyst Mark Delaney said in a research note that GM has capitalized on improved pricing of newly launched big SUVs, besides benefitting from disciplined incentives in the industry because of lean inventory. Separately, iSeeCars.com analyst Karl Brauer said the company’s ability to quickly recover following weeks of factories closure earlier this year shows profit discipline and operational costs, as well as improving demand for its full-size pickups and SUVs.
GM shares are currently trading around $37.60 on volume of over 10 million. The 52-week range of the stock is $14.33-$38.96. GM stock declined sharply to touch a low of around $14 in March following the coronavirus pandemic. However, it managed to recover its lost value to reach the pre-pandemic trading price levels in the subsequent months. The company has a market value of $54.024, while its P/E ratio is 16.80.