DETROIT - General Motors (GM) reported a record third-quarter profit that doubled results in the same period a year ago, despite falling sales and market share in the U.S.
The Detroit automaker earned $2.77 billion, or $1.76 per share, compared with $1.36 billion, or 84 cents per share a year ago.
Sales in the U.S., GM’s most lucrative market, fell nearly 4 percent through September. But GM said its strategy to cut low-profit sales to rental car companies and focus on selling to individual buyers, a strong performance in China and cost cuts led to the record.
Excluding a 4-cent benefit from an unspecified ignition-switch recall recovery, GM earned $1.72 per share. That soundly beat Wall Street estimates of $1.46 per share. Revenue hit a record $42.8 billion.
Stock market reaction was underwhelming. Shares of GM rose just about 0.4 percent to $33.10 in premarket trading Tuesday morning. They’ve ranged from $26.69 to $36.88 during the past year but recently have been below the company’s $33 initial public offering price in 2010.
U.S. auto sales have started to slow after hitting a record 17.5 million last year, but GM seems to be unaffected.
The company said it expects the strong performance to continue through the fourth quarter, and it put a little more swagger on its full-year guidance. GM now expects pretax earnings to be at the high end of previous guidance of $5.50 to $6 per share.
The strong outlook comes despite predictions that U.S. auto sales have hit a plateau and may not match last year’s record. GM’s market share fell almost a full percentage point this year, but the company says its focus on profitable retail sales to individual buyers paid off. U.S. retail market share rose one-half point, the company said.
Chief Financial Officer Chuck Stevens said prospects are good, too, because GM is rolling out important new vehicles. “We’re entering the heart of our product launch cadence,” Stevens said, adding that within the next 18 months, GM will replace its compact and midsize crossover SUVs in the hottest part of the U.S. market.
GM also said it completed a $5 billion stock buyback a quarter early during the July through September period. Stevens said the company will start on its second tranche of buybacks worth $4 billion in the fourth quarter.