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General Motors Co. reported a profit of $2.5 billion in the third quarter, improving on a loss in the same quarter last year and driving the automaker's stock price up more than 9 percent Wednesday to $36.59 a share.

The Detroit automaker's strong performance was bolstered by the arrival of its all-new full-size Chevrolet Silverado and GMC Sierra pickup trucks in the third quarter, with the pricey vehicles partially driving up the company's average transaction price to record levels.

The arrival of GM's new pickups helped to drive North American profit margins of 10.2 percent on $2.8 billion in earnings, said GM CFO Dhivya Suryadevara. 

GM was "also helped by a strong pricing environment. We had a ton of price discipline this quarter that really helped all the segments across the board," she told reporters. 

That discipline in pricing is something the Detroit automaker is committed to maintaining as interest rates continue to rise and sales volumes contract. 

"Our intent is absolutely to stay disciplined," Suryadevara told investors on a conference call.

GM reported earnings per share of $1.87, up 41.7 percent from the same period last year. GM Financial made $500 million in the third quarter.

The profit reported Wednesday by the Detroit automaker was in sharp contrast to a year ago, when it lost $2.9 billion due to the sale of its money-losing Opel-Vauxhall business in Europe.

This is the first quarter this year in which GM has improved on its 2017 profits, with hits from rising commodity costs due to steel and aluminum tariffs largely causing the Detroit automaker to readjust its earnings outlook for 2018 after the second quarter. GM profits were off 2.8 percent in the second quarter at $2.4 billion.

"Our third-quarter performance demonstrates our determination to manage risks and deliver strong business results while continuing to advance the future of mobility," GM CEO Mary Barra said in a statement released Wednesday.

The carmaker said Wednesday its pre-tax earnings were up 25 percent at $3.2 billion in the third quarter of 2018, with a profit margin of 8.8 percent.

GM said made about $2.8 billion on its North American business in the third quarter, up from about $2.1 billion a year ago. The Detroit automaker made $100 million from its international business during the third quarter, with losses in South America offset by the $500 million GM made in China.

The Detroit automaker's North American performance, which yielded profit margins of 10.2 percent, was bolstered by a record average transaction price of more than $36,000, up roughly $800 per unit compared to the same period last year and $4,000 above industry average, GM reported.

GM Cruise lost $200 million in the third quarter. The automaker has said it plans to spend a total of $1 billion on GM Cruise in 2018 as the autonomous vehicle development arm of the company prepares a plan to launch a driverless taxi service next year.

So far this year, the company has spent $500 million GM Cruise. Barra told investors that an additional $500 million of spending in the fourth quarter — which would double year-to-date spending in one quarter — would largely come from hiring at GM Cruise.

"Right now we're looking at what still will roughly be $1 billion as we previously communicated, but the team is being smart and if they can achieve what they need to achieve at a lower level they will," Barra said. "We're still holding at that ($1 billion) level and it's due to a lot of hiring and continued work from accumulating miles and experience."

nnaughton@detroitnews.com

Twitter: @NoraNaughton

 

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