GM reports smaller-than-expected coronavirus hit in second quarter

General Motors Co on Wednesday posted a smaller-than-expected second-quarter loss, as high-margin pickup truck sales and aggressive cost-cutting helped mitigate the impact of a forced shutdown to slow the spread of the coronavirus that left its North American plants idled until May 18.

The better-than-expected results sent the No. 1 US automaker's shares up 3.8% in premarket trading.

"These results illustrate the resiliency and earnings power of the business as we make the critical investments necessary for our future," Chief Financial Officer Dhivya Suryadevara said in a statement.

During the quarter GM said its retail sales showed signs of recovery, improving from a drop of 35% in April versus the same month in 2019 to a decline of 20% in May and June. GM did not provide an earnings forecast for the year but said it ended the second quarter with $30.6 billion in cash.

Suryadevara told reporters that if the US economy continues to recover, GM should generate cash flow of between $7 billion and $9 billion during the second half of the year.

She said the automaker should repay its $16 billion revolving credit line by the end of the year, an action that again depends on a continued economic recovery.

Spiking COVID-19 cases across southern and southwestern US states have left that recovery in doubt.

Weekly jobless claims numbers from the Labor Department released last week showed the number of Americans filing for unemployment benefits unexpectedly rose for the first time in nearly four months, suggesting the labor market was stalling amid the resurgence in new COVID-19 cases and depressed demand.

GM said it was "working all avenues" to boost US dealer inventories and all of its US full-size pickup truck and full-size SUV plants are back at three shifts.

Nearly all of its other plants are now working at pre-pandemic shift levels.

GM also said it would increase production of light-duty full-size pickups at its Fort Wayne assembly plant by about 1,000 units a month beginning Sept 1.

GM reported a net loss for the quarter of $758 million, or 56 cents per share, down from a profit of $2.4 billion, or $1.66 per share, a year earlier. On an adjusted basis, the loss was $806 million.

Excluding one-time items, GM reported a loss of 50 cents per share while analysts had expected a loss of $1.77 per share.