What Happened?
Shares of automotive manufacturer General Motors (NYSE: GM) jumped 15% in the afternoon session after the company reported strong third-quarter results that surpassed expectations and raised its full-year financial outlook.
The automaker posted third-quarter adjusted earnings of $2.80 per share, easily topping the consensus estimate of $2.32. Revenue for the quarter came in at $48.59 billion, which also significantly surpassed Wall Street's expectation of $45.02 billion. Capping off the positive report, the company boosted investors' confidence by raising its full-year adjusted earnings per share guidance to a midpoint of $10.13, an 11% increase from its previous forecast.
The shares closed the day at $66.61, up 14.8% from previous close.
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What Is The Market Telling Us
General Motors’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. But moves this big are rare even for General Motors and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 19 days ago when the stock dropped 2.9% on the news that the company announced a recall for over 23,000 of its 2024 Chevrolet Equinox EV models and separately placed 900 workers on indefinite layoff. The recall was issued because the electric vehicle's pedestrian alert sound system might not have been loud enough to warn people nearby when the car was moving at low speeds. This failure meant the vehicles did not meet federal safety standards. In a separate development, GM laid off 900 workers at its Fairfax Assembly plant in Kansas. The company stated it needed to retool the plant for the production of the gas-powered Equinox model. The combination of a safety-related recall and production-related layoffs appeared to weigh on investor sentiment.
General Motors is up 29.8% since the beginning of the year, and at $66.70 per share, has set a new 52-week high. Investors who bought $1,000 worth of General Motors’s shares 5 years ago would now be looking at an investment worth $1,865.
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