GM had a happy Halloween. The immediate reaction to the largest U.S. automaker's solid third-quarter adjusted earnings of $1.87 per share, above consensus of $1.25 a share, and strong full-year guidance of $5.80 to $6.20 per share in adjusted earnings was a 9% bump on the trading session Wednesday, Oct. 31. But as RealMoney contributor Anton Wahlman pointed out, General Motors' (GM) unit sales for the quarter were a minor disaster. Every single brand of automobile GM sells saw unit sales dropped in the Q3, and in every geography in which GM sells cars ... you see where I'm going with this ... unit sales fell.
Wahlman went on Wednesday to explain how GM managed to deliver on earnings despite a big fat flop on sales. Hint: While fewer people bought GM cars, more of those who did went for the pricey SUV options over the economical sedan. More on that below.
Meanwhile, investors, analysts and the folks at TheStreet were all digging into Facebook's earnings for a second day. Facebook's (FB) closed Wednesday's trading up about 3.81% at $151.79 as the company's third quarter earnings report out Tuesday encouraged shareholders over social media platform Instagram's ability to make more money.
As TheStreet's Jacob Sonenshine explained Wednesday, however, the trouble now is that Instagram stories don't command ad rates as high as ads on Facebook's news feed. Facebook, for its part, has yet to figure out to make Instagram story ads as profitable as those on its legacy social media platform's news feed. Over at our sister site, The Deal, David Hatch explains that Facebook might never even have been able to buy Instagram had the FTC known then what it knows now.
In any case, Facebook is trying to get users to click-through on Instagram ads, which could result in purchases that give an advertiser a good return on investment. When it cracks to code on this stories advertising model, advertisers will see that ROI, and Facebook will be able to leverage solid ad pricing, Sonenshine wrote. Of course Facebook has some obstacles in its way, including building the right tools for advertisers that allow them to target people without giving up too much of their privacy. Sounds to us like a tall task.
Markets Today: The U.S. stock market on Wednesday finished its best two day rally in more than two years as some solid earning reports helped the blue chip index close on a high note after a tough month that saw it fall about 5%. The Dow Jones Industrial Average and the Nasdaq had their best two-day perfmances since February 2016 while the S&P 500 raked in its best two-day effort since June 2016.
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Tom Terrarosa, Reporter, TheStreet Inc.
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