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General Motors (GM) stock has climbed as the company announced its earnings report from the first quarter of 2020. General Motors reported $294 million in profit.
General Motors Company (NYSE: GM) has announced results from 2020’s first quarter. The general outlook from the financial community is quite dampened because of the effects of the coronavirus. However, some companies like General Motors have successfully pulled in satisfactory earnings and increased its stock value.
In a May 6 news release, General Motors announced that it gathered $294 million in profit from the first quarter of the year. The earning seems satisfactory, especially in a financial clime largely affected by the ongoing coronavirus pandemic which has affected manufacturing as well as sales. However, the figure is a whopping 86.7% fall from the $2.1 billion it pulled in from the same period last year.
Furthermore, General Motors put its net revenue at $32.7 billion, losing 6.2% from $34.9 billion. Earnings before interest and taxes (EBIT) fell 45.9%, to $1.2 billion, from $2.3 billion the year before. Operating costs also came to $903 million for the quarter.
The decline in General Motors’ figures is easily tied to the pandemic. The company experienced a massive drop in demand because of the lockdown enforced to curb the spread of COVID-19. Deliveries in the US fell 7% from the 618,335 deliveries the company did in last year’s first quarter.
General Motors is however optimistic. Chairman and CEO Mary Teresa Barra, has said she is confident that the team will put things back in order.
“The strength of this company has always been its people, and I am proud to stand with our best as we confront these challenges together – as one team – while we continue our transformation. We have a track record of making swift, strategic and tough decisions to ensure our long-term viability and create value for all of our stakeholders.”
General Motors (GM) Stock
General Motors (GM) stock climbed 6% in pre-market trading on news of report. Now trading at $22.17, this has dropped a bit. But the rise is still quite impressive. It is over 4% up. While this is some increase from the $21.26 where it closed yesterday, General Motors has not performed well enough on average. It has lost nearly 40% in 2020, and more than 41% in the last 12 months.
Regardless, its earnings per share before tax is at 62 cents per share. Estimates from Refinitiv had predicted 30 cents per share.
Major automakers, like General Motors, Fiat Chrysler Automobiles N.V. (NYSE: FCAU), and Ford Motor Company (NYSE: F), are estimated to have lost at least $100 million, for every day their factories remained closed. This is the primary reason why, unsurprisingly, automakers like General Motors have not performed favorably.
In other automaker news, Ferarri N.V. (NYSE: RACE) released its quarterly earnings report and was briefly more valuable than General Motors. GM’s market cap is now at $30.45 billion with Ferrari at $27.48 billion.
GM plans to begin a slow restart of all of its North American factories. Starting on May 18, the factories will operate at a limited pace for an unspecified period. This should last until the company is confident that it can return to normalcy.