Lower Costs, Strong Sales Lead GM (GM) to Easily Beat Q3 Profit Expectations
The Detroit, MI-based automaker posted revs of $37.6, up just under $1 billion from the same period last year. Net income slipped to $1.5 million, or 89 cents per share. Excluding one-time items, earnings were 93 cents per share.
Overall, the Street was looking for revs of $35.92 billion and EPS of 60 cents.
The Company noted that, "Through annuitizations and lump sum payments, approximately $29 billion of GM’s U.S. salaried pension liability is expected to be eliminated compared with an original estimate of $26 billion."
For the fourth-quarter, GM is expecting seasonal trends to continue. In addition, continued positive results may result in reversal of a "significant" U.S. and Canadian deferred tax asset valuation allowance. GM said that, "[a]t Sept. 30, 2012, valuation allowances on deferred tax assets in the United States and Canada were $35.6 billion and $3.2 billion." Goodwill impairment may come as a result.
In Europe, GM sees calendar adjusted EBIT at ($1.8) billion to ($1.5) billion, with break-event adjusted EBIT targeted for mid-decade.
Shares are up over 4 percent in early action.