New York (CNN Business)General Motors reported a huge jump in earnings compared to a year ago, bouncing back sharply from a steep loss in the second quarter during the pandemic.
The largest US automaker posted earnings of $4.1 billion, excluding special items, up from $2.5 billion on that basis a year earlier. It was far better than the $2.1 billion that analysts had been forecast — and up 64% from the earnings GM posted in the third quarter a year ago.
Revenue was essentially flat $35.5 billion, matching forecasts. GM was able to maintain sales despite a 4% decline in the number of cars sold worldwide. The shutdown of auto plants earlier in the year because of health protocols limited inventories of vehicles available for sale, and the recession also hurt demand, especially from some fleet buyers such as rental car companies.
But the demand that was there drove the average price of the vehicles higher, allowing GM to maintain flat earnings.
“Sales in the US and China are recovering faster than many people expected, and GM is benefiting from robust customer demand for our new vehicles and services, especially our full-size pickups and SUVs,” said John Stapleton, GM’s interim CFO.
But the real improvement came in the company’s profit margin, which jumped to 14.9%, up from 8.4% a year ago.
Shares of GM (GM) gained more than 6% in early pre-market trading on the news.
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