Mary Barra, Chairman and CEO of General Motors.
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General Motors on Tuesday beat Wall Street expectations for the third-quarter but lowered its guidance for the year due to the United Auto Workers’ 40-day strike against the automaker.
GM lowered its guidance for earnings per share diluted-adjusted to between $4.50 and $4.80, down from $6.50 to $7.00 per share. It also lowered its automotive adjusted free cash flow to zero to $1 billion, down from $4.5 billion to $6 billion.
Here’s what GM reported Wednesday compared to Wall Street’s expectations, according to Refinitiv consensus estimates:
Adjusted earnings: $1.72 per share, vs $1.31 expected
Automotive revenue: $35.473 billion vs. $33.818 billion expected.
The earnings per share included a 52 cents impact from the work stoppage and 15 cents from revaluations of its stake in Lyft and warrants from French automaker PSA Group.
third-quarter earnings handily beat Wall Street expectations, despite a 40-day strike that cost the automaker $1 billion during the three months, the company said before the markets opened Tuesday.
Here’s what Wall Street expects, according to Refinitiv consensus estimates:
- Adjusted earnings: $1.31 per share
- Automotive revenue: $33.818 billion
Analysts will be interested in learning additional details about how a 40-day strike by the United Auto Workers impacted the company’s third and fourth quarters and whether or not it was enough for GM to change its outlook for the year.
Wall Street analysts estimated the national work stoppage – the longest since 1970 against GM – cost the automaker more than $2 billion in lost production.
The strike ended on Friday with ratification of a new contract for GM’s 48,000 union workers. The deal included pay raises, lump-sum bonuses and $11,000 ratification bonuses for most workers, among other benefits.
In August, prior to the strike, GM reconfirmed its full-year guidance for earnings per share of $6.50 to $7.00 per share. The company touts it has beat Wall Street estimates for 17-consecutive quarters.
Shares of GM have almost fully recovered from double-digit declines during the strike. The stock closed Monday at $36.64, down about 6% since before the strike started on Sept. 16.
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