General Motors reported third-quarter earnings on Thursday. The carmaker missed Wall Street estimates, earning 81 cents per share, lower than the expected 97 cents.
But GM chalked up the miss to one-time expenditures. Overall, the business in North America continues to perform well, especially where big SUVs are concerned. China operations are also strong, and even a trouble spot — Latin America — posted what GM called break-even numbers for the quarter.
Losses continue is Europe, but CEO Mary Barra said on a call with analysts after GM reported earnings that “operational improvements” continue there, even as GM’s business in Russia weakens (GM isn’t alone — Ford is also struggling to deal with a Russian auto market that isn’t turning out to be so great, as the Ukrainian crisis grinds on and sanctions weaken the Russian economy).
GM has been restructuring its European business ever since recovering from bankruptcy in 2009 — when the company briefly considered shedding Opel, its main European brand.
Barra and CFO Chuck Stevens covered a lot of ground on the call — everything from profit margin expectations to the ongoing ignition-switch recall to the importance of Cadillac and mid-size pickup trucks. But an entertaining moment occurred when Morgan Stanley lead auto analyst Adam Jonas asked Barra to express her thoughts on what GM makes of various disruptive technologies in the industry, the frontiers of mobility and car sharing, and startups like Uber and Lyft.
By way of background, Jonas isn’t just the most out-there auto analyst on Wall Street — he’s starting to give transportation futurists a run for their money. He recently predicted the “end of human driving,” for example. And he’s suggested that covering only carmakers isn’t going to cut it for Wall Street auto analysts as the world of transportation…transforms.
Barra took the question in stride — after all, she was being asked to discuss a time when GM won’t be selling people individual cars! She sensibly deflected Jonas’ query, but she acknowledged that the auto industry will see “more change in the next 5 to 10 years than in the past 50.”
“People will still need to get from point A to point B,” she added, before stressing that GM is currently working on a number of initiatives, particularly those that involve what she called “urban mobility.”
Ford will report third-quarter earnings on Friday. It will be interesting to see if Jonas pursues this line of questioning with Ford’s new CEO, Mark Fields, or whether he’ll confine his more speculatively theorizing to Barra and GM.
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