The first quarter business results are in.
As automakers across the globe reported financial losses for the first quarter of the year, General Motors bucked the trend. Despite factories being shuttered and bad sales in the wake of the coronavirus pandemic, the company claims it earned a $294 million profit in the first few months of 2020. Total revenue came to $32.7 billion. GM's financial report also boosted shares by more than 6 percent although its stock is down by more than 40 percent so far this year. It's still too early to know how the second business quarter will end up because the pandemic is still very much an issue, but GM, for now, is confident about its situation.
"We believe that we're positioned well to manage through this because we've taken swift actions to preserve liquidity," said GM CFO Dhivya Suryadevara. She confirmed the automaker currently has $33.4 billion in liquidity on hand at the moment.
Meanwhile, GM aims to restart production on May 18 in most of the US and Canada, though newly implemented safety precautions to protect workers' health are being enacted. Although GM didn't specifically state so in the press release announcing its profit, it's pretty clear that trucks and SUVs remain the company's main source of revenue. Sales of the Chevy Silverado 1500 have been relatively solid so far this year and are expected to continue.
Obviously this is good news for GM and it'll likely continue with special zero-interest financing offers to keep this momentum. The company also said it's beginning to see signs of recovery in China where production has completely restarted. To further help reduce some costs, GM's top executive team has taken salary cuts. It also cut its salaried workforce's pay by 20 percent.
Despite the challenges automakers still face, it's clear GM is in relatively decent financial shape and truck sales will continue to play a critical role, perhaps more than ever.