GM cost-cutting drives shares higher

SOUTHFIELD, MICH— General Motors Co. just reminded Wall Street that there are reasons to get excited about its stock besides the hype around its technology advances.

Americans still want their SUVs, and the largest U.S. automaker beat analysts’ profit estimates by boosting sales of those more-lucrative models. While GM slashed North American production by more than a quarter, cost cuts kept margins at healthy lev- els. The company’s shares climbed the most in three weeks to a record.

The results pushed up a stock that, until the past two months, had stagnated as investors feared that peaking car sales and Silicon Valley’s foray into auto technology meant GM’s best days had passed. Instead, chief executive officer Mary Barra has changed perceptions of the automaker’s position in electric and selfdriving vehicles. The automaker has cut annual costs by more than $5 billion (U.S.) since the beginning of 2014. The automaker reported adjusted earnings of $1.32 a share for the quarter ended last month, beating the $1.11 average analyst estimate.

While Wall Street has been excited about GM’s future technology, the past quarter was one of retrenchment. Production cuts were the biggest factor in revenue falling 14 per cent to $33.6 billion.

GM also took $5.4 billion in charges related to the sale of its European units Opel and Vauxhall to France’s Peugeot SA.