Mary Barra, Chairman and Chief Executive Officer of General Motors.
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General Motors on Tuesday beat Wall Street expectations for the third quarter, but lowered guidance for the year due to United 40 Workers' 40-day strike against the automaker.
The cost of the strike, $ 1 billion for the quarter and $ 3.8 billion for the year, was significantly higher than previously estimated, causing GM to lower its revenue guidance for the year.
Now it expects to make between $ 4.50 and $ 4.80 per share, down from the previous forecast of between $ 6.50 and $ 7 per share. It also lowered the car-adjusted free cash flow to a range of zero and $ 1
Here's what GM reported Wednesday compared to Wall Street expectations, according to Consensus Consensus Estimates:
- Adjusted Earnings: $ 1.72 per Share, versus $ 1.31 Expected
- Revenue: $ 35.47 Billion versus $ 33.82 billion expected.
The strike shaved 52 cents per share of carmaker revenues in the third quarter. Revaluations of Lyft's ownership interest and subscription rights from the French carmaker PSA Group took a further 15 kroner per share of revenue.
The company's shares rose by less than 1% in pre-market trading.
Wall Street analysts estimate national shutdowns – the longest since 1970 against GM – cost the automaker more than $ 2 billion in lost production.
The strike ended Friday with the ratification of a new contract for GM's 48,000 union workers. The agreement included pay raises, one-time bonuses and $ 11,000 ratification bonuses for most workers, among other benefits.
In August, prior to the strike, GM confirmed its full-year earnings per share guidance of $ 6.50 to $ 7.00 per share. The company says it has beaten Wall Street estimates for 17 consecutive quarters.
Shares of GM have almost completely recovered from double-digit falls during the strike. The stock closed on Monday at $ 36.64, down about 6% since before the strike began on September 16.
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