Loading…
Saturday, August 23, 2014
Current Weather
Loading Current Weather....
Published: Friday, 7/26/2013

GM 2Q profit tops Wall Street estimates

However, lower international profit offsets N. America

ASSOCIATED PRESS

DETROIT — General Motors’ second-quarter profit topped expectations as a solid performance in North America offset declining profit in some international markets and more losses in Europe.

GM’s net income excluding items amounted to 84 cents per share in the three months ended June 30. That was 9 cents better than analysts surveyed by FactSet had expected.

GM earned $1.26 billion from April through June, or 75 cents per share. That compares with $1.5 billion, or 90 cents per share, a year ago.

GM shares rose more than 2 percent in premarket trading.

Overall, net income fell 16 percent in the quarter as GM faced tougher competition in Asia-Pacific countries outside of China. The company’s finance chief said today that Japanese rivals used a weaker yen to lower prices.

GM earned $1.98 billion before taxes in North America, up 4 percent over a year ago as small businesses bought more pickup trucks in the U.S. Profit in China also rose, GM said.

The company narrowed its European loss by $284 million to $110 million as cost cuts kicked in and new products such as the Opel Mokka small crossover SUV and Adam subcompact car sold well, said Chief Financial Officer Dan Ammann.

That helped to counter falling pretax profits in international operations. Competition from Japanese automakers forced GM to lower prices in Australia and Southeast Asian countries, the company said.

Mr. Ammann told reporters today that Japanese automakers were using the weak yen to cut prices in Southeast Asia and Australia. The yen has been falling against other currencies, making goods made in Japan less expensive when sold in other countries, including the United States.

“We don’t see that abating in the immediate term,” Mr. Ammann said, adding that the company has new products and is taking other unspecified actions to boost international profits.

Mr. Ammann said GM would build on its performance in Europe during the second half, but wouldn’t say if the loss would be cut further.

“The things that we control we feel very good about,” Mr. Ammann said of Europe. “Obviously what we don’t control is the European macro environment. That remains very challenging, but we’re making good progress despite that.”

In North America, Mr. Ammann said he expected improved performance in the second half as GM gets the full benefit of rolling out its redesigned full-size pickup trucks, the Chevy Corvette sports car, an all-new Cadillac CTS and other new models.

“That’s going to give us a good tail wind into the second half,” he said.

Overall, GM’s revenue rose 4 percent to just over $39 billion, beating Wall Street’s estimate of $37.7 billion.

Worldwide sales rose 4 percent to 2.49 million vehicles.

GM shares rose 81 cents, or 2.2 percent, to $37.95 in premarket trading.



Guidelines: Please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. If a comment violates these standards or our privacy statement or visitor's agreement, click the "X" in the upper right corner of the comment box to report abuse. To post comments, you must be a Facebook member. To find out more, please visit the FAQ.

Related stories