General Motors trades 2.6% higher on Wednesday despite missing the analysts’ estimate for quarterly revenue

General Motors said on Wednesday that it lost $194 million in 2019’s Q4. The company attributed the loss to the autoworkers strike that spanned over 40 days during which vehicle production remained suspended leading to significantly lowered profits.

Before taxes and interest, GM highlighted its earnings to have taken a hit of $2.6 billion in the fourth quarter due to the strike. The total loss on an annual basis was valued at $3.6 billion that stemmed from the strike.

General Motors Figures Versus Analysts’ Estimates

According to Refinitiv, analysts were expecting General Motors to generate $31.04 billion in revenue in the fourth quarter. In terms of adjusted earnings, the experts’ forecast was capped at 1 cent per share. In Wednesday’s report, however, the company posted $30.8 billion in quarterly revenue that missed the estimate but the adjusted earnings were reported much higher than expected at 5 cents per share in the recent quarter.

General Motors stock printed a 2.6% improvement in premarket trading despite the missed revenue forecast. The stock topped the $35 per share mark briefly but dropped back to around $34 later on Wednesday. GM’s performance in the stock market has been weighed in 2020 so far with an around 7% loss in January. While it recorded a high of above $40 in the stock market in 2019, the overall performance still remained flat on average with the company closing the year at around the same level at which it opened ($34 per share). The automaker currently has a market value of $49.1 billion.

In fiscal 2020, as per the company’s guidance, it is now expected adjusted earnings between $5.75 to $6.25 per share. The adjusted operating cash flow, GM added, is expected around $13 billion to $14.5 billion in 2020. The adjusted automotive free cash flow, on the other hand, is anticipated between $6 billion to $7.5 billion this year.

General Motors Operating Profit Remained Optimistic In 2019

Despite the loss in the fourth quarter, GM highlighted its operating profit to have kept optimistic in 2019. Operating profit (before taxes and interest) was recorded at $8.4 billion in 2019 with the Q4 contributing $105 million to it. In the same quarter last year, GM had announced $8.4 billion of operating profit while a significantly higher $11.8 billion was declared for the full year 2018.

Amidst the complications of the trade war, sales dropped by 15% for GM in China last year. The recent Coronavirus outbreak is expected to keep the figure down for the automaker in the upcoming months as well.