GM lift by North American and Asian sales

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GM lift by North American and Asian sales

Post  Administrator on Thu Aug 04, 2011 9:22 pm

General Motors nearly doubled its second-quarter net income to a better-than-expected $2.5bn, marking the Detroit carmaker’s sixth profitable quarter since it emerged from bankruptcy two years ago.

GM reported higher earnings in North America and Asia and a small profit in its European operation focused on Opel/Vauxhall, which recently completed a long-running and politically contentious restructuring plan.
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The carmaker, one of the global industry’s largest producers alongside Toyota and Volkswagen, reported second-quarter revenue of $39.4bn, up 19 per cent on a year ago.

Dan Akerson, GM’s chief executive, said the company’s investments in fuel economy, design and quality were paying off, and that it was “better positioned today than any other auto manufacturer in the world to take advantage of the growth of the industry”.

The company’s net income in the second quarter was nearly twice the $1.3bn it reported in the second quarter of 2010. Bloomberg consensus forecasts had forecast that GM’s quarterly net income would come in at just under $2.1bn, and that it would report revenues of $36.4bn.
Despite beating forecasts, GM's share price fell about 3 per cent in early trading, in line with a broader rout on the US stock market.

GM’s core North American operation reported earnings before interest and tax of $2.25bn, an improvement of 41 per cent on a year ago.

GM Europe, which includes both Opel and the carmaker’s Chevrolet operations on the continent, reported ebit-adjusted earnings of $102m, compared with a loss of $160m in the second quarter of 2010. The unit incurred restructuring costs of about $100m.

Opel’s chief Nick Reilly said earlier this week that GM Europe was on track to meet its target of breaking even this year before restructuring charges.

Mr Akerson said there was “clearly more work to do” at Opel but added that the business continued according to plan.

GM’s international operations – mostly in Asia – reported ebit of $573m, 14 per cent better than in the second quarter of 2010. This included equity income of $400m from its Chinese joint ventures, unchanged from a year ago.

GM South America’s ebit was $57m, down from $195m in the second quarter of last year.
Mr Akerson said that GM was the collective market leader in fast-growing Bric markets – Brazil, Russia, India and China – where it held a more than 12 per cent share, including more than 13 per cent in China alone.

The company, which was rescued in 2009 by a massive taxpayer bail-out, reported automotive cash flow of $3.8bn in April to June.

Mr Akerson said the result marked “another step in our journey toward sustained, profitable, growth”.

GM said it expected its ebit in the second half of this year to be “modestly lower” than in the first half, and that its full-year ebit would show solid improvement over 2010.

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