General Motors overcomes US sales drop and China losses to post 3rd quarter profit of $3 billion

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U.S. sales are down and a once-profitable joint venture in China is losing money, but General Motors still managed to post $3 billion in net profits last quarter

DETROIT — U.S. sales are down and a once-reliably profitable joint venture in China is losing money, but General Motors still managed to post a third quarter profit of $3 billion Tuesday, slightly less than it made a year ago.

The Detroit automaker reported $48.8 billion in revenue from July through September, 10% more than last year, aided by U.S. average vehicle sale prices that were steady with last quarter at over $49,000.

Chief Financial Officer Paul Jacobson said that while overall sales in the U.S., GM's most profitable market, fell 2.2% in the quarter, much of that drop was from sales to large fleet buyers. Sales to individuals, which generally are more profitable, rose 3%.

While other automakers have gotten stuck with too many high-priced vehicles when many buyers are looking for lower costs, GM has yet to see such a shift, Jacobson told reporters.

“I think that the consumer has held up remarkably well for us,” he said, adding that next year should be consistent with this year as the Federal Reserve continues to reduce interest rates and lower borrowing costs. “Nothing that we've seen has changed from where we've been the last several quarters.”

Excluding one-time items, GM had an adjusted profit of $2.96 per share, beating Wall Street estimates of $2.38, according to FactSet. The company’s revenue also soundly beat estimates of $44.67 billion.

Shares of General Motors Co. rose 2% before the opening bell Tuesday.

The company’s joint venture in China, though, lost $137 million, compared with a $192 million profit a year ago. Jacobson said the loss is