GM’s first-quarter profit broke record earnings in North America, added strong profits in China, and broke even in Europe.
Americans paid record prices for new GM vehicles in 2016 for the first-quarter. Shattering Wall Street expectations, GM earned a first-quarter profit of $1.85 billion, surpassing last year’s profit of $953 million.
USA Today reports that GM made $1.26 for earnings-per-share, which is well above the $1 consensus. GM shares rose to $33.38, a 3.7% increase and overall revenue increased 4.5% to $37.3 billion for the first-quarter.
“We’re growing where it counts,” said GM CEO Mary Barra. “Gaining retail market share in the U.S., outpacing the industry in Europe and capitalizing on robust growth in SUV and luxury segments in China.”
The increased interest in SUVs and larger vehicles contributed to the high profits. Redesigned models like the 2016 Chevrolet Malibu have much higher sticker prices than the models they replaced, but people are still buying. Along with the higher prices, the amount of vehicles being purchased surely adds to the profit gain as well: globally, a Chevy is purchased every six-and-a-half seconds.
These profits come at a time when there is a lot of worry around the auto industry.
The Wall Street journal reports that despite investors’ overall market skepticism, GM remains positive.
“At the end of the day, there is a significant amount of negative sentiment from the investor perspective around the auto industry,” Chuck Stevens, GM’s chief financial officer said in a statement. “We’ve performed reasonably well in a difficult environment.”
“It’s a great quarter,” Stevens said. “Great start to the year and a year when we expect to deliver another record from a profitability perspective.”
According to The Detroit News, GM is the first of the three main auto companies in Detroit to release their earnings. Fiat Chrysler Automobiles and Ford Motor Co. are expected to release their earnings results later on in April.