General Motors Co. on Tuesday posted a net loss of nearly $3 billion in the third quarter compared a net profit of $2.8 billion a year ago, with the bottom line pulled down by hefty costs from the sale of its European business and steep cutbacks in U.S. vehicle production.
Operating profit, however, cruised past analyst expectations.
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The result for the three-month period ended Sept. 30 included a $2.3 billion expense from a tax allowance that went away following the August sale of GM's Opel European unit to French car maker Peugeot. GM posted a net profit of $115 million on continuing operations, minus the year-ago results from the business in Europe.
The nation's largest auto maker by sales said operating profit adjusted for one-time items equaled $1.32 per share, surpassing Wall Street analysts' average forecast of $1.11.
Operating profit from continuing operations dropped 31% to $2.5 billion, hurt by production cuts in North America. Several factories were idled during the quarter to prepare for new-model launches. GM also has moved aggressively to cut passenger-car production in the face of weak demand, and it continues to trim less-profitable car sales to rental agencies.
GM's third-quarter production in North America fell 25%, according to WardsAuto.com. That included a 9% drop in output of large pickup trucks and related SUVs, GM's most profitable products, according to Barclays.
The production cuts pressured revenue from continuing operations, which fell 14%, to $33.6 billion, better than the average analyst forecast of $32.7 billion.
GM previously signaled that the third-quarter results would be the weakest of the year because of U.S. factory downtime. Executives expect profits to rebound in the fourth quarter as factories resume busier schedules.
Write to Mike Colias at Mike.Colias@wsj.com
(END) Dow Jones Newswires
October 24, 2017 08:04 ET (12:04 GMT)