Another strong performance in its key US market helped General Motors post a third-quarter profit that beat analysts' expectations.
GM said in a statement that pickup-truck and SUV sales helped the automaker to achieve a 10.8% margin. A 40-day strike by 49,000 workers — the longest against a major car company in 50 years — was offset by the good truck and SUV sales.
The carmaker said that the strike cost in $1 billion for the quarter.
"The work stoppage in the US negatively affected North American business results in the third quarter and expected results for the year," the company said. "In the third quarter, about two weeks of vehicle production was lost."
Net income in the third quarter fell to $2.3 billion, or $1.60 a share, compared with $2.5 billion, or $1.75 a share, a year earlier. Excluding one-time items, GM earned $1.72 a share. Analysts had expected $1.31, on average, according to IBES data from Refinitiv.
For the calender year, GM estimated that the strike would cost approximately $2 per share. But the company was clearly glad to have minted a new four-year contract with UAW-represented membership at GM factories.
"Our new labor agreement maintains our competitiveness, preserves our operating flexibility and allows us to continue improving our quality and productivity," CEO Mary Barra said in a statement. "We remain focused on strengthening our core business and leading in the future of personal mobility."
China's declining sales environment weighed on GM's results, but the company highlighted Cadillac's performance in the region.
"Despite continued softening of the overall vehicle market, Cadillac third-quarter sales increased 11 percent, driven by the XT4 and XT5," GM said, noting the contribution of two relatively new SUVs. "With XT6 joining the lineup, Cadillac will strengthen its foothold in the steadily growing luxury SUV segment."
GM shares were trading up about 2% in pre-market action on Tuesday, to just over $37. Year-to-date, the stock is up 9.5%.
(Reuters reporting by Nick Carey and Ben Klayman; editing by Nick Zieminski)