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CNN
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General Motors reported stronger-than-expected third-quarter profits, providing guidance that puts the company on track for record profits in 2024, just a year after a costly strike by members of the United Auto Workers union.

The company reported it earned adjusted profit of $3.4 billion in the third quarter, up from $3.2 billion in the same period last year, hurt by the first two weeks of the more than six-week strike. Adjusted profit for the first nine months of the year reached $9.9 billion.

Sales rose more than 10% to $48.8 billion, beating forecasts by nearly $800 million and rising significantly faster than the 5% increase in vehicles sold. That means GM is selling cars at higher average prices this year than in 2023. The average transaction price in North America reached almost $50,000.

GM estimated last year that the strike cost the company $1.1 billion. The company had argued during the strike that it could not meet union wage demands and compete with non-union automakers, but ultimately agreed to give workers an immediate 11% pay increase and additional wage increases that would raise wages by at least would increase another 14 percentage points compared to the strike next four years.

During the strike, the UAW’s slogan on the picket lines was that record profits should lead to a record contract. The deal included the largest wage increases the union has ever won at GM.

Still, GM on Tuesday raised its profit outlook for the rest of the year. The new forecasts suggest full-year profits will now surpass 2022’s record profit.

The strong results and guidance sent GM (GM) shares up 2% in premarket trading. As of Monday’s close, shares were already up 37% this year.

GM Chief Financial Officer Paul Jacobson told reporters on Monday that GM had been cutting costs ahead of the strike in anticipation of wage increases for its unionized workers.

“We were able to look at it as a cost of doing business,” he said. “No regrets about the UAW contract.”

Jacobson praised the GM team for raising its profit target, noting the company’s ability to “overcome inflationary pressures.”

If General Motors has any problems, it’s in its non-union operations in China, where the company suffered a loss of $137 million in the quarter, compared to the $192 million profit it made there a year earlier .

The number of vehicles sold in China fell 37% to 372,000 in the quarter, due to increasing competition from Chinese automakers and what GM called “challenging market conditions.”

China was once GM’s largest market for vehicle sales, but third-quarter sales now account for just over half of U.S. sales volume.