GM earnings top estimates despite coronavirus, as it sets restart date

DETROIT — General Motors on Wednesday reported a huge plunge in first-quarter profit that nonetheless raced past expectations, and the automaker outlined plans for a May 18 restart of most of its North American plants shut down by the coronavirus pandemic.

The news sent GM shares up 8% in pre-market trading.

The No. 1 U.S. automaker posted net income attributable to common stockholders of $247 million or 17 cents per share, down more than 88% from $2.12 billion or $1.48 per share in the same period in 2019. Excluding one-time items, GM reported 62 cents per share, higher than the 30 cents per share expected by Wall Street analysts.

The Detroit automaker has slashed costs and made other moves during the COVID-19 outbreak, including suspending its dividend and share buybacks, closing its Maven car-sharing unit, delaying work on some product programs, reducing marketing budgets and cutting white-collar workers' salaries. It also added $16 billion to its cash position by drawing down credit lines.

GM had previously suspended its 2020 profit outlook because of uncertainty over the outbreak and did not provide an update on Wednesday.

Smaller U.S. rival Ford last month raised another $8 billion from corporate debt investors to further shore up its finances after previously drawing down its credit lines.

GM Chief Financial Officer Dhivya Suryadevara warned employees in an internal video on March 26 that "significant austerity measures" were necessary to avoid "serious damage" to GM's long-term viability.

One ray of hope has been China, where the pandemic began but where GM has resumed production. While first-quarter sales there fell 43%, they rebounded to grow by double digits in April. That offers hope for the U.S. market, where sales declined 7% in the first quarter.

U.S. automotive production ground to a halt in March as the number of COVID-19 infections grew rapidly. But with President Donald Trump pushing for Americans to get back to work and several U.S. states reopening their economies, the focus in the auto sector has shifted to when production can safely restart.