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The UAW strike was costly, but not as bad as investors had feared.
General Motors (GM +0.00%) said that its third-quarter net income fell 8.7% from the third quarter of 2018 to $2.3 billion, a better-than-expected result after a nationwide strike shut down GM's U.S. factories in mid-September.
Excluding one-time items, GM earned $1.72 per share, well above the $1.31 average estimate from analysts polled by Thomson Reuters. Revenue of $35.5 billion, down 0.9% from a year ago, was also solidly above Wall Street's $33.82 billion estimate.
As expected, GM also cut its full-year guidance to reflect the effects of production lost during the strike.
| Metric | Q3 2019 | Change vs. Q3 2018 |
|---|---|---|
| Revenue | $35.5 billion | (0.9%) |
| Global deliveries | 5,684,871 | (7.4%) |
| EBIT-adjusted | $3.0 billion | (5.9%) |
| EBIT-adjusted margin | 8.4% | 0.4 ppts lower |
| Net income | $2.3 billion | (8.7%) |
| Adjusted earnings per share | $1.72 | (8%) |
| Automotive operating cash flow | $5.0 billion | $2.5 billion higher |
| Adjusted automotive free cash flow | $3.8 billion | $3.4 billion higher |
Data source: General Motors. "EBIT-adjusted" is GM's non-GAAP expression of earnings before interest and taxes (EBIT) minus one-time items and with some other small adjustments. Automotive results exclude results related to GM's captive-financing subsidiary. Ppts = percentage points.
Per GM, here is how the United Auto Workers' national strike against the automaker affected its third-quarter results:
Except as noted, all profit and loss figures in this section are presented on an EBIT-adjusted basis.
GM took two special items totaling $267 million in the third quarter: a one-time charge of $390 million related to its restructuring efforts and a one-time credit of $123 million related to a favorable tax-related court decision in Brazil. GM took total charges of $440 million in the third quarter of 2018.
As of Sept. 30, 2019, GM had $20.7 billion in cash available to its automotive business, and an additional $16.5 billion in available credit lines, for total liquidity of $37.2 billion. That's up from $33.8 billion as of the end of 2018.
On the other side of the ledger, the automaker had $15.3 billion in long-term debt as of Sept. 30, versus $14 billion at the end of 2018. Its unfunded pension obligations stand at $5.7 billion, unchanged from the end of 2018.
As anticipated, the effects of the strike led GM to trim its full-year 2019 guidance. It now expects:
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