General Motors Posts Earnings Beat, Sees Europe Weakness
General Motors (NYSE: GM) rose Thursday after second-quarter earnings fell less than expected and the automaker posted a slightly narrower-than-expected loss in Europe.
Excluding items, net income fell to $1.5 billion, or 90 cents a share, down from $2.5 billion or $1.54 a share in the same period last year. Analysts had been expecting earnings of 74 cents a share on average.
Europe was GM's global trouble spot. It lost $361 million in the region, amid a regional economic slowdown. The company had earned more than $100 million there a year earlier.
"Our results in North America, our international operations and at GM Financial were solid but we clearly have more work to do to offset the headwinds we face, especially in regions like Europe and South America,” said GM Chairman and CEO Dan Akerson.
He did not provide a timetable for when GM expects its European business to be profitable again.
Global revenue fell 5 percent to $37.6 billion, short of expectations even though GM sold slightly more vehicles than it did the prior year. That was mainly due to the strengthening U.S. dollar relative to other currencies. Almost the entire sales decline could be blamed on currency effects, the company said.
GM continues to generate cash, however -- unlike the dark days of its publicly-financed bailout. It garnered $1.7 billion in free cash from its automotive business in the quarter.
While business challenges remain, GM said four of its five business segments were profitable, and it's remained in the black for 10 straight quarters -- a feat the company has not achieved in more than a decade.
Shares rose less than 1 percent to $19.74 in mid-morning trading.
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