General Motors Co.’s quarterly profit plunged as the novel coronavirus (COVID-19) pared demand and caused the automaker to close factories. However, GM results were better than had been expected by financial analysts.
The Detroit-based company also said it intends to reopen the bulk of its U.S. and Canadian operations on May 18 “under extensive safety measures.”
GM posted a first-quarter profit of $294 million, or 17 cents a share. That was down from $2.16 billion, or $1.48, for the same period in 2019. Revenue for the quarter fell 6.2 percent to $32.7 billion
The automaker reported adjusted earnings before interest and taxes of $1.25 billion for the quarter, down from $2.31 billion a year earlier. On a per-share basis, the adjusted earnings figure for the 2020 first quarter was 62 cents. That was better than analyst estimates of 30 cents.
GM shut down North American plants in March as COVID-19 spread across the region. The automaker makes the bulk of its profit in North America, thanks to large pickups and sport-utility vehicles. The coronavirus also slammed the economy.
The company said when it reopens factories, it will implement procedures that “meet or exceed” guidelines from the Centers for Disease Control and Prevention and the World Health Organization. During the shutdown of vehicle production, GM has been producing ventilators in collaboration with Ventec Life Systems. The ventilators are being made at a GM plant in Kokomo, Ind.
The automaker said it was able to maintain operations in South Korea and that it “gradually” restarted operations in China in mid-February. The coronavirus originated in Wuhan, China.
GM said it ended the first quarter with $33.4 billion in automotive liquidity, including drawing down about $16 billion from a revolving credit line. GM burned through $903 million in cash during the first quarter.
“We are focused on preserving liquidity,” Chief Financial Officer Dhivya Suryadevara said in a statement. GM has suspended its quarterly dividend and is deferring executive and salaried pay.