March 5, 2021

G.M. Earnings Climb 89%

DETROIT — General Motors said on Thursday that it earned $2.5 billion in the second quarter, a healthy 89 percent increase over its results in the period a year earlier.

G.M., the nation’s largest automaker, reported that revenue for the period increased 19 percent, to $39.4 billion.

The results were driven by strong sales in G.M.’s core North American market, where it earned $2.2 billion, up from $1.6 billion in the second quarter of 2010.

“G.M.’s investments in fuel economy, design and quality are paying off around the world as our global market share growth and financial results bear out,” Daniel F. Akerson, G.M.’s chief executive, said in a statement.

The company, which posted profit in all of its automotive regions, said it earned $100 million in its European unit, which has been struggling with higher costs and sluggish sales. The results included a $100 million restructuring cost, G.M. said.

In Asia, G.M. reported income of $600 million, while in South America it posted income of $100 million.

The results were higher than analysts had expected, given the slow rate of industry sales in the American market.

“It’s a solid quarter,” said Daniel Ammann, G.M.’s chief financial officer. “It’s on plan. We had good revenue growth and good earnings growth.”

G.M. ended the quarter with cash reserves and available credit of $39.7 billion, compared with $33.6 billion in the period a year earlier.

The company produced 2.4 million vehicles in the second quarter, compared with 2.25 million in year-earlier period. Its global market share was 12.2 percent, up from 11.6 percent in the second quarter of 2010.

“We were able to get prices up and incentives down, and that really highlighted the value of the product,” Mr. Ammann said. “Our goal is to drive long-term, sustained performance.”

The company said it expected income in the second half of the year to be “modestly lower” than in the first half, because of market conditions and the overall industry outlook.

For the first six months of the year, G.M.’s net income was $5.4 billion, compared with $2.2 billion in the first half of 2010.

“Our progress has been steady, and we’re preparing to launch more new products this year, including the Chevrolet Sonic in North America, the Opel Zafira in Europe and the Baojun 630 in China to keep the momentum going,” he said.

New products are a major driver of G.M.’s results, and the company hopes to capitalize on its momentum with two new Cadillac cars announced Thursday. In 2012, G.M. also plans to begin building a large sedan, the XTS, in Canada and a rear-wheel-drive compact car, tentatively called the ATS, at a plant in Lansing, Mich., said Mark Reuss, the president of G.M. in North America, at an industry conference in northern Michigan.

Both cars will be in segments that are dominated by foreign nameplates, but Mr. Reuss said he was confident that G.M. could make headway with a “uniquely American solution” for luxury car shoppers.

“We have extensively and exhaustively studied the competitive segment, and we have benchmarked the best,” he told conference attendees.

Mr. Reuss also noted that Chevrolet is in the midst of renewing and expanding its car lineup with a new minicar, the Spark, coming next year and revamped versions of the Malibu and Impala sedans on the way.

As a result, Chevrolet will have entries in all five passenger-car segments for the first time in its 100-year history, he said, with none older than the Cruze compact, which was introduced a year ago and has produced big sales numbers. G.M. plans to offer a diesel-powered variant of the Cruze in the United States in 2013.

The new cars are critical to G.M.’s future; Mr. Reuss said cars are outselling trucks at G.M. for the first time in his career.

Nick Bunkley contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=be7c665156b0aae2230bff5115a51c37

Speak Your Mind