GM shares hit all-time high

DETROIT — Shares of General Motors hit an all-time high Tuesday as investors focused on a $2.5-billion third-quarter pretax profit and ignored a big accounting loss.

The Detroit automaker’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 blacked out and before taxes, the company made $1.32 per share, trouncing Wall Street estimates. Analysts polled by Factset 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 per cent to US$33.6 billion, but that also beat expectations of $32.2 billion.

GM says its strong pretax performance came despite a 26 per cent 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 lowprofit 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.”

GM will start testing autonomous vehicles without a human backup driver “in quarters, not years,” CEO Mary Barra said, but will not do that until the cars meet metrics to prove they are safe.