DETROIT - Shares of General Motors (GM) soared to new highs Tuesday morning as investors focused on a whopping $2.5 billion third-quarter pretax profit and ignored a big accounting loss.
The Detroit automaker's stock spiked more than 2% to around $46.70 after the company announced its earnings news Tuesday. GM shares are in record territory since the company went public again in 2010 after a trip through bankruptcy protection during the financial crisis.
GM's $3 billion net loss came from a $5.4 billion charge for selling Opel and Vauxhall to France's PSA Group, which closed in August. But with that backed out and before taxes, the company made $1.32 per share, trouncing Wall Street estimates. Analysts polled by FactSet had expected $1.11 per share.
Much of the accounting charge came from previous losses that GM can't use to offset future tax obligations.
Revenue without Europe fell 14 percent to $33.6 billion, but that also beat expectations of $32.2 billion.
GM says its strong pretax performance came despite a 26 percent production cut in North America during the quarter to close out the 2017 model year and adjust to slowing demand, mainly for passenger cars. The company made just over $2 billion pretax in North America, as well as just under $500 million from its joint venture in China.
Chief Financial Officer Chuck Stevens said the company overcame the production cuts because it sold more high-profit trucks and SUVs and fewer lower-margin sedans, but it also cut costs at an annual running rate of $5 billion since 2014. The company also has cut low-profit sales to rental car companies and focused more on sales to individual buyers. Stevens attributed the performance to "overall resilience of a better business model that we built in North America."
On a conference call with industry analysts, GM executives also gave details about autonomous vehicles and other business developments:
— When GM's revamped pickup truck debuts next fall, GM will have a "broader portfolio" to compete with Jeep and others in off-road performance, CEO Mary Barra said. New full-size SUVs will be built on the same underpinnings.
— GM will start testing autonomous vehicles without a human backup driver "in quarters, not years," but will not do that until the cars meet metrics to prove they are safe, Barra said. She didn't say how many quarters.
— GM is exploring options on how to deploy autonomous vehicles now being tested by its Cruise Automation unit and could partner with another company or go on its own, she said. The company also is evaluating international markets, including Berlin and London, to test autonomous vehicles. It has developed a third-generation self-driving car and is working on a fourth, Barra said.
— The company lost production of about 20,000 Chevrolet Equinox compact SUVs during a nearly monthlong strike recently by auto workers at a factory in Canada, Stevens said. That production will not be made up, he said. The strike ended Oct. 16.
With Europe no longer included, GM reported profits for all of its business units for the first time since the fourth quarter of 2014. Even South America, which has been a money loser in recent quarters, posted a $52 million pretax profit.
With European operations backed out, GM posted a net profit from continuing operations of $100 million.