GM profit declines, still beats estimates
General Motors reported a 16 percent decline in second-quarter profit Thursday as weak results at its international operations division offset gains in North America and a stark improvement in Europe.
The Detroit automaker earned $1.26 billion from April through June, or 75 cents per share. That's down from $1.5 billion, or 90 cents per share, a year ago.
Still, GM handily beat Wall Street predictions when one-time items were excluded. On that basis, GM earned 84 cents per share in the quarter, 9 cents better than the forecast of analysts surveyed by FactSet.
The company's shares closed down 6 cents to $ 37.08 in trading Thursday.
In North America, strong sales of pickup trucks drove pretax profit up 4 percent to $1.98 billion.
U.S. sales of big pickups boomed in the first half, rising 23 percent as the housing industry started to recover from the recession and small businesses started buying again. At GM, Silverado sales gained 26 percent and Sierra sales rose 21.
Pickups are GM's top-selling vehicles, and they bring in an estimated profit of $10,000 apiece.
Chief financial officer Dan Ammann said he expected improved performance in the second half as GM gets the full benefit of rolling out the new trucks, as well as the 2014 Chevy Corvette sports car, an all-new Cadillac CTS sedan and other new models.
"That's going to give us a good tail wind into the second half," he said.
But Ammann also described headwinds in Asia-Pacific countries outside of China. He said Japanese rivals used a weaker yen to cut prices, forcing GM to respond in kind and lowering its profits.
The Japanese yen's decline against other currencies has made goods from Japan less expensive when sold in other countries. Ammann said Japanese automakers supply much of the Asia-Pacific region from Japan.
Although pretax income rose in China, GM's International Operations profit fell by $400 million to $228 million.