General Motors Co. (GM.N) reported fourth-quarter earnings that blew away estimates and reiterated the upbeat profit forecast for 2019 it gave last month. The shares rose in U.S. early trading.

Earnings were US$1.43 a share last quarter, compared with the US$1.25 average of analysts’ estimates. Less than a month ago, the carmaker had given investors a lengthy presentation and projected that earnings would rise to as much as US$7 a share.

Key Insights

The quarterly statement is good news for GM in an increasingly challenging environment. Global carmakers are fighting through slowing demand in all their major markets and a trading war between the U.S. and China.

Just a few hours ago, Daimler AG said it’s preparing a “comprehensive” cost-cutting program to help cope. GM continues to get better pricing from a consumer shift to trucks and sport utility vehicles. The US$6.54 a share for 2018 earnings was far better than the original guidance of US$6 thanks in large part to pickup sales, Chief Financial Officer Dhivya Suryadevara said on a conference call.

Investors have been focusing on slowing demand in China, the world’s biggest car market. GM said the Chinese auto market will be flat this year. Its income from the region fell to US$307 million in the quarter from $504 million a year earlier. GM is taking actions to cut costs in China to improve profits in a softening market, Suryadevara said.

Market Reaction

The shares rose 2.5 per cent to US$40.62 in early U.S. trading. Through Tuesday, they had soared 13 per cent since Jan. 10, the day before GM gave its surprise upbeat profit forecast for 2019.