General Motors has reported that it has received more than the profit it had expected even as the company cut back its costs and it sold expensive SUVs, trucks, and crossovers. However, investors were upset with the revenue that missed the estimates amidst the falling sales of vehicles and the descending market share. The share of GM fell 3% on Tuesday morning.
Revenue slumped 3.4% from $36.1 billion to $34.88 billion in the same quarter the previous year. The company’s market share in US slumped from 17% to 16.1%. The adjusted earnings of the company per share got a boost of 31% by the reevaluations of the stake of GM in Lyft and PSA group which is a French auto maker. The profit margins of GM improved when they started selling expensive trucks. For its pickup trucks that were recently updated which included GMC Sierra and Chevrolet Silverado, the average prices of sales rose by $5,800 each year.
A slowdown in the sale of vehicles in China which is the largest market of auto in the world has stressed the performance of the company in the country. The income of the first-quarter of the company in China fell to $376 million for the same period in the previous year and the sales slumped 18% in China.
GM earned in first quarter $2.1 billion or $1.48 every share which rose from $1.05 billion or 72 cents every share earlier than a year. The company in April reported that sales descended 7% from previous year. It said that the buyers are interested in luxurious sports utility vehicles of the company and the pickup trucks.
The company is planning to launch additional pickups in 2019 which will include two new pickups from GMC and Chevrolet. To familiarize itself to the market demands, the company has idled its factories producing vehicles that are slow-selling thereby cutting 14,000 jobs in US and Canada factories.