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GM profit dips on truck changeover, but beats estimates

DETROIT — General Motors on Thursday reported a higher-than-expected quarterly profit despite a drop in production of high-margin pickup trucks, as it gears up for new models that are expected to boost profits next year. Like rivals Ford and Fiat Chrysler Automobiles, GM is banking on highly-profitable Chevy Silverado and GMC Sierra pickup trucks to lift profits, as consumers shift away from traditional passenger cars in favor of these larger, more comfortable trucks, SUVs and crossovers. During the first quarter, the process of changing over to GM's new pickups resulted in a drop in production of 47,000 units. GM Chief Financial Officer Chuck Stevens said the production drop had resulted in a drop in pre-tax profit of up to $800 million. Earlier this year, GM said its 2018 profits would be flat compared with 2017, but expected its all-new pickup trucks would boost margins starting in 2019. On Thursday, GM reiterated its full-year 2018 forecast for adjusted earnings in a range from $6.30 to $6.60 per share. The automaker said capital expenditures were more than $500 million higher in the quarter because of investments its new pickup trucks and a family of low-cost vehicles under development with Chinese partner SAIC Motor Corp. On Wednesday, rival Ford said it would stop investing in most traditional passenger sedans in North America. CFO Stevens told reporters on Thursday that GM has "already indicated that we will make significantly lower investments on a go-forward basis" in sedans. 2019 GMC Sierra View 21 Photos GM benefited from a lower effective tax rate in the quarter, but adjusted pre-tax margin fell to 7.2 percent from 9.5 percent a year earlier. Stevens said the company's profit margin should hit 10 percent or higher in the second quarter and for the full year. GM said material costs were $700 million higher in the first quarter, and it expects those costs to continue rising. The automaker said it would counter those increases with cost cutting measures. "It is a more difficult environment than it was three or four months ago," Stevens said when asked about rising commodity prices from potential steel and aluminum tariffs announced by the Trump administration. "But we are confident we can continue to offset that." The company reported quarterly net income of $1.05 billion or $1.43 per share, a drop of nearly 60 percent from $2.61 billion or $1.75 per share a year earlier. Analysts had on average expected earnings per share of $1.24.

Can Fernando Alonso win Indy? Here's why and why maybe not

SPEEDWAY, IN – The month of May has been a joy ride for Fernando Alonso at Indianapolis Motor Speedway. The two-time Formula 1 champion came to Indy having never turned left in a race car without also turning right. But he acquired such a feel for Indy's 2 1/2 -mile rectangle during a month of practice and qualifying that he's considered a strong contender to win the 101st Indianapolis 500 on Sunday, rookie or not. "You're not trying to bring somebody on who has very little experience driving very high-performance cars," said 2003 Indy 500 winner Gil deFerran, who this month has helped Alonso learn the nuances that make the speedway such a tough place to conquer. "I suppose it would be a little bit different if you were dealing with a younger, much less experienced person." Driving a McLaren Honda from the potent Andretti Autosport team, Alonso was consistently near the top of the speed charts in practice, he qualified fifth fastest at 231.300 mph, and he handled runs in heavy traffic like a driver who'd done it many times before. But those were the prelims. The race is another creature. "The car felt the best (it has) in the last two weeks. I was making some moves, taking some different lines. I am extremely happy." Other drivers say the speedway looks different on race day when the crowd, expected to top 300,000, fills the grandstands and makes an already narrow track seem even tighter. The three-wide rolling start is something Alonso has never experienced, and he will see the green flag from the middle of the second row between Takuma Sato and J.R. Hildebrand. And the space he'll be given by his competitors in the first 180 laps may disappear In the last 20 when it's every driver for themselves. Can a rookie like Alonso win this race? Absolutely, as Andretti driver Alexander Rossi showed last year when his team used a fuel-mileage strategy to win in his first taste of Indy. We're talking about Fernando Alonso here, who easily could show his rookie stripes to the rest of the field most of the day. His best lap in Friday's final practice, 226.608, was fifth fastest in the field and, more important, he said the car felt comfortable in heavy traffic. "The car felt the best (it has) in the last two weeks," Alonso said. "I was making some moves, taking some different lines.

Watch NASCAR racer Jeff Gordon put one over on a used car dealer... sorta

Full Disclosure: in my younger days, I loved nothing more than tormenting passengers with my behind-the-wheel hijinks. Once, after a particularly artful handbrake turn on a two-lane at around 50 miles per hour, I left one backseat occupant crying in their own lap. This isn't necessarily something to be proud of, but it gives you a glimpse into why it is that I find this ad from Pepsi so damn disappointing. The premise is beautiful. Take NASCAR legend Jeff Gordon, give him a disguise and set him loose upon some unsuspecting used car dealer. Hilarity ensues.
Except that this Pepsi Max commercial is so obviously staged, it can't help but feel like some ham-fisted marketing fail. From the strategically placed aftermarket cupholder mounted mid-dash for the hidden camera to the fact that the supposed dealer Camaro is displayed as a 2009 model (Hint: Chevrolet didn't make any), this clip is about as organic as a Twinkie. Still, we would never turn down a chance to watch Gordon thrash on a rental-spec coupe - only problem is, he probably didn't even do the driving himself. Check it out below.