General Motors outlined plans on Wednesday for a May 18th restart of most of its North American plants shut down by the coronavirus pandemic as it reported a stronger-than-expected quarterly profit, sending its shares up 5.3 per cent.
The number one US automaker had previously suspended its 2020 profit outlook because of uncertainty over the outbreak and did not provide an update on Wednesday.
The news came as leading European car-maker BMW warned the industry would be held back by the coronavirus outbreak "for quite some time to come".
"With the level of uncertainty out there, it's too early to tell until the economy starts to open up," General Motors chief financial officer Dhivya Suryadevara told reporters. But she said that "the second quarter will be the hardest-hit".
She said the coronavirus pandemic had reduced the automaker’s first-quarter profit by $1.4 billion, with about half of that in North America.
GM chief executive Mary Barra said on a conference call with analysts that the restart at its plants will be gradual, starting with one shift and then building to two or three shifts depending on demand.
GM posted net income attributable to common stockholders of $247 million or 17 cents per share, down more than 88 per cent on the same period in 2019. Excluding one-time items, GM reported 62 cents per share, well above the 30 cents per share expected by Wall Street analysts.
Reporting its first-quarter results, BMW said net profit fell slightly from a year earlier, when the company had a large one-time expense.
Net profit fell 2.4 per cent to €574 million in the first three months of the year. The year-earlier figure was lowered by a €1.4-billion charge stemming from a European Union anti-trust case.
Car sales fell 21 per cent in the quarter as first China and then Europe and the United States saw dealerships close during the outbreak. Earnings were supported by a favourable product mix in which vehicles with higher profit margins dominated.
It said sales this year would be substantially below last year and that a quick recovery “is unlikely” as the situation would only begin to stabilise in the third quarter.