US profits for General Motors rose 4pc as European losses narrow
General Motors posted a higher-than-expected quarterly profit today following strong demand in North America and cost-cutting in its struggling European business.
Europe, where industry sales hit a 20-year low in the first half, remains "very challenging," GM Chief Financial Officer Dan Ammann told reporters. He added it was too soon to call any sort of improvement there.
GM's net income in the second quarter fell to $1.2bn, or 75 cents a share, from $1.5bn, or 90 cents a share, a year earlier.
Excluding one-time items, mostly related to the acquisition of preferred shares in GM Korea, the automaker earned 84 cents a share, 9 cents above the average forecast of analysts polled by Thomson Reuters I/B/E/S. GM shares were up 2pc in premarket trading.
Revenue rose 4pc to $39.1bn, above the $38.37bn analysts had expected.
In May GM reported a stronger-than-expected first-quarter profit as it kept a tight grip on costs in its North American and European businesses. That grip was still in place in the second quarter in Europe, where the company cut $400m in costs compared with a year earlier. Ammann said GM continues to be aggressive in those efforts.
GM's North American business had operating earnings of almost $2bn in the latest quarter, easily topping the $1.75bn that nine analysts polled by Reuters had expected. Ammann said the US market remains robust, but GM declined to raise its full-year forecast for industry-wide US sales.
GM Europe had an operating loss of $110m in the second quarter, almost one-third smaller than Wall Street had expected. The company's sales and market share in Europe fell in the quarter, however.
Ammann said GM remains focused on executing plans previously outlined in its alliance with PSA Peugeot Citroen but has no plans to put more money into the French automaker.
GM's international operations, which includes China, reported a disappointing profit of $228m, down 64pc. Ammann cited pricing pressure in Australia and Southeast Asia, as well as cost headwinds in India.