Strong North American earnings boost GM
Print Edition
General Motors Co yesterday posted a better-than-expected quarterly profit on strong results in its core North American market and the first revenue increase in Europe in two years.
GM Chief Financial Officer Dan Ammann said the No. 1 US automaker’s European unit remains on track to achieve its target of breaking even in the next year or so.
“The story in Europe overall is really consistent with the plan we laid out,” he said.
“Our overall objective of getting to break-even by mid-decade, clearly we’re well on track toward that.”
GM’s money-losing European unit has been a key focus for investors since the automaker went public in the autumn of 2010 following a bankruptcy reorganization and a US$49.5 billion government bailout. GM has lost money in that region for 13 straight years.
GM’s success in Europe echoed that of its smaller US rival Ford Motor Co, which last week boosted its full-year profit outlook and painted a brighter picture in Europe.
GM’s net income attributable to common shareholders fell to US$757 million, or 45 US cents a share, in the third quarter, compared with US$1.48 billion, or 89 cents a share, in the year-earlier quarter. But operating earnings rose almost 15 percent to US$2.64 billion.
Excluding one-time items related to the repurchase of preferred stock and tax expenses, GM earned 96 cents a share, 2 cents more than analysts polled by Thomson Reuters had expected.
The results in North America and Europe helped offset weaker-than-expected earnings in GM’s international operations, which include China and South America. The international earnings fell 61 percent to US$299 million as the markets outside China were a drag. Analysts polled by Reuters had expected a profit of US$329.2 million.
Revenue in the quarter rose 3.7 percent from last year to US$38.98 billion, but that was below US$39.49 billion analysts had expected.
GM’s operating earnings in North America jumped 27 percent to a surprising US$2.19 billion.
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