General Motors Co. (NYSE: GM) reported third-quarter 2019 results before markets opened Tuesday. The automaker posted adjusted diluted earnings per share (EPS) of $1.72 on revenues of $35.47 billion. In the same period a year ago, the company reported EPS of $1.87 on revenues of $35.79 billion. The latest results also compare to the consensus estimates for EPS of $1.31 and $33.82 billion in revenues.

Net income for the quarter totaled $2.35 billion, down from $2.53 billion in the year-ago quarter. Adjusted pretax (EBIT) earnings totaled $2.97 billion, down by 5.9% from $3.01 billion in the year-ago quarter.

GM said that the recently ended UAW strike reduced its North American adjusted EBIT by $1 billion, or $0.52 per share. For the third quarter, the company lost about two weeks of production.

North American sales were seven percentage points higher than in the same quarter last year, and sales volume rose by 3.5% to 863,000 units. Volume sales declined in Europe, Africa and Asia/Pacific, including China, from 969,000 units last year to 829,000 units. South American volume rose by 2,000 units to 176,000. Worldwide sales fell by 5.5% from 1.98 million units to 1.87 million.

CEO Mary Barra commented:

Our new labor agreement maintains our competitiveness, preserves our operating flexibility and allows us to continue improving our quality and productivity. We remain focused on strengthening our core business and leading in the future of personal mobility.

GM revised its full-year guidance to reflect a change in capital expenditures and the impact of the strike. The company lowered its adjusted EPS guidance from a prior $6.50 to $7.00 to a new range of $4.50 to $4.80. Adjusted operating cash flow is now expected to reach $5.5 billion to $7.5 billion, and adjusted free cash flow guidance dropped from $4.5 billion to $6.0 billion to a new range of zero to $1 billion.

Consensus estimates call for fourth-quarter EPS of $1.33 and revenues of $33.36 billion. For the full year, analysts are looking for EPS of $5.62 and revenues of $138.9 billion.

The impact of the UAW strike on third-quarter results was much less than analysts expected. Higher vehicle prices added $200 million to adjusted U.S. EBIT, even including the impact of the strike. Buyer incentives averaged $5,188 per vehicle in the third quarter, about $850 more than in the same period a year ago and $500 more sequentially.

Just looking at the company’s full-year guidance revisions suggests that the bad news has been deferred into the next quarter. Don’t be surprised if U.S. incentives go even higher to help offset another $2 billion or so in strike impact with higher unit volumes. There remains plenty of room for discounts to the high-priced, high-demand SUVs and pickups. GM still needs to do something about China, though, and that’s a tougher nut to crack than accounting for a six-week strike.

Shares traded up about 5.2% to $38.55 after the opening bell, within a 52-week range of $31.46 to $41.90. The 12-month consensus price target on the stock is $47.42.

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