General Motors (NYSE:GM) eked out a $294-million profit for the first quarter despite the fallout from the coronavirus pandemic that’s shuttered factories and devastated sales.
The COVID-19 outbreak cut deeply into GM’s performance, costing the largest U.S. automaker $1.4 billion on a pretax basis during the first three months of the year. Of the top U.S.-based automakers, GM has the biggest operations in China where the pandemic originated in late December and shuttered factories beginning in late January.
According to Chief Financial Officer Dhivya Suryadevara, "We believe we are positioned well to manage through this.” She declined to provide an outlook for the company, saying the second quarter is expected to be the hardest hit by the coronavirus pandemic."
GM’s earnings showed some of that strain already with net profit sliding 86.7% from $2.2 billion during the same three months last year. On an adjusted basis, its pretax profit for the first quarter was $1.3 billion, down 45.9% from $2.3 billion a year ago.
Revenue also slipped, but not as much. It fell 6.2% to $32.7 billion in the quarter, down from $34.9 billion a year ago.
Of the Detroit automakers, GM was expected to be best positioned to weather a crisis such as the coronavirus pandemic. For years, the automaker has aggressively cut costs and exited unprofitable markets, including Europe, to fortify its balance sheet.
Shares of GM jumped by $1.49, or 7%, to about $22.75, soon after the opening bell Wednesday. The stock is down more than 40% this year.
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