Shares of General Motors (NYSE:GM) soared in Wednesday’s pre-market session after the car maker reported far better-than-expected third-quarter results and made a bullish call on its full-year earnings forecast thanks to better pricing in North America and gains in China.
The Detroit-based company blew past Wall Street’s estimates and swung to a third-quarter profit of $2.53 billion, or $1.75 per share, from a loss last year of $2.98 billion, or $2.03 per share, when the company sold its European unit to Groupe PSA.
Stripping out items, GM posted earnings of $1.87 per share, trouncing the $1.25 per share expected by analysts.
Its revenue in the period also jumped 6.4% to $35.8 billion and came in ahead of the $34.85 billion forecast by Wall Street.
The results impressed investors who sent GM shares up 7.8% to $36.15 before the opening bell on Wednesday.
READ: General Motors tops expectations with fourth-quarter results
GM was able to raise prices on its cars in the US by about $800 per car, which pushed up profits as GM delivered nearly 700,000 vehicles in the US in the quarter.
China, the world’s biggest car market, also powered its earnings as GM China delivered nearly 836,000 vehicles in the quarter and Cadillac sales in the country set a record. GM was also able to post record equity income in the third-quarter from its Chinese operations.
"Our disciplined approach to the U.S. market, combined with strength in China and further growth of GM Financial, drove a very strong quarter," said GM CFO Dhivya Suryadevara in a statement. "We will continue to take actions to mitigate headwinds including foreign currency volatility and commodity costs."
The automaker still forecasts that its full-year profit will come in at $5.80 to $6.20 per share. But the company said that its forecast is set to reach the high end of that range thanks to an improved tax rate and robust performance.
Contact Ellen Kelleher at ellen@proactiveinvestors.com