Automobile giant, General Motors, reported better than expected third-quarter earnings on the back of solid sales of highly profitable crew-cab trucks.
The company recorded earnings per share of $1.87, compared to expectations of $1.25, with total revenue of $35.79 billion versus the expected $34.85 billion.
GM’s CFO Dhivya Suryadevara on Wednesday’s conference call said that GM actually sold fewer vehicles during the third quarter -- but sold them at higher prices. GM's third-quarter vehicle sales volume dropped by 14.7% from the previous year. But an average price increase of about $800 per vehicle (to more than $36,000) set a record for transaction prices. The $36,000 figure is about $4,000 over the industry average, and helped the company maintain profitability in a competitive environment. The company’s sale of its European business to Groupe PSA also resulted in a net income of $2.5 billion, or $1.75 a share, compared with a loss of $2.98 billion, or $2.03 a share, a year ago.
As the Detroit automaker swung to profit from previous year’s loss, shares jumped by 6.3% in the early session.