GM bullish on North America after Q2 beat

July 24 01:58 2015

General Motors CFO Chuck Stevens said Thursday demand for new vehicles remains strong in North America after the automaker reported a profit beat but fell short revenue estimates. Shares were up more than 7 percent in premarket trading on the New York Stock Exchange.The logo of American carmaker General Mo

GM’s North American operations generated nearly all of its operating profit, doubling profits to $2.8 billion on margins of 10.5 percent, which the company said were a record for any quarter since it emerged from bankruptcy in 2009. GM has lately commanded higher prices for its products, but the automaker is not seeing signs of resistance from consumers, Stevens said.

“Our pickup share in the second quarter was up close to 3 percentage points on a year-over-year basis, so we continue to see a lot of strong demand for full-size pickups, SUVs and crossovers,” he said. In its earnings report, General Motors said adjusted net income more than doubled in the second quarter, due to robust profit margins driven by North American truck sales and continued strength in China.

Stripping out one-time charges, GM earned $2.9 billion, or $1.29 a share, in the latest quarter, up from $1.4 billion, or 58 cents a share, and well ahead of the $1.08 a share forecast of analysts. Profits rose despite declining global vehicle deliveries and a 3.5 percent decline in worldwide revenue. Net income rose to $1.1 billion, or 67 cents a share, from $200 million, or 11 cents a share, a year ago, when it was hurt by a big charge relating to recall costs. Quarterly revenue of $38.2 billion was well below analyst estimates for $40.2 billion. The translation of non-U.S. based currency shaved about $2.2 billion off the top line, Stevens said. “If you exclude that, our revenue was up close to a billion dollars year over year, with strength really in North America.”