General Motors (GM) reported third-quarter earnings that nearly doubled to beat Wall Street estimates, as strong demand and higher pricing in North America lifted the automaker.
Continue Reading Below
The company said Thursday its net income jumped to $1.38 billion, or 81 cents a share, from $698 million, or 45 cents a share, in the same period a year earlier. Excluding one-time expenses, earnings checked in at 97 cents a share, two cents higher than Wall Street’s projection.
Revenue ticked higher to $39.3 billion, up from $39 billion. Analysts were looking for revenue of $39.8 billion.
Shares rose 1.7% to $31.85 in recent trading. GM’s stock has fallen about 22% since the start of the year.
Operating earnings in North America led the way with a 12% gain, improving to $2.45 billion. GM’s North America profit margin, a closely watched gauge of performance, edged higher to 9.5% in the third quarter versus 9.3% last year.
The Detroit-based company said average transaction prices in the U.S. marked record highs. For full-size pickup trucks, prices are up $4,000 per vehicle since GM redesigned the Chevrolet Silverado and GMC Sierra.
Continue Reading Below
GM brands also increased their North America market share to 16.8% from 16.7%. GM sold a total of 884,000 vehicles in the region, reflecting growth of 9.4%. U.S. market share was level at 17.3%.
The results in North America offset continued weakness in Europe, where the company saw its loss widen to $387 million from $238 million. Detroit-based GM recently detailed an outlook that calls for a profit in Europe by 2016.
International earnings, which include China, dropped roughly 20% to $259 million. China was a bright spot for the segment amid better margins and market share.
In South America, GM swung to a $32 million loss from a profit of $284 million in the year-ago quarter.
GM spent approximately $700 million related to recall repairs during the latest period. But those expenses were included in GM’s charges in the first half.
GM, the nation’s top seller of cars and trucks, has battled a string of recalls this year. An ignition-switch recall that’s connected to at least 29 deaths put GM under a microscope on Capitol Hill. The Department of Justice could fine GM over a years-long delay in recalling the 2.6 million vehicles.
During a conference call with analysts, GM Chief Executive Mary Barra said the company has repaired 1.2 million cars that were included in the ignition-switch recall, more than half of the population still on the road.
GM is working with suppliers to accelerate the shipment of repair parts for all recalls, Barra added.
Rival Ford Motor Co. (F) is scheduled to report earnings Friday. Analysts are bracing for the No. 2 U.S. automaker to book a lower profit.