GM’s second quarter profits slip 41%, hurt by slow European sales
by The Associated Press
Net income from April through June fell by $1-billion compared to 2011, dropped to $1.5-billion
Detroit—A big loss in Europe dragged down General Motors’ second-quarter profit.
The automaker’s net income from April through June fell 41 per cent to $1.5-billion—$1-billion less than the same quarter a year earlier, GM announced.
A $361-million loss in Europe, coupled with $19-million of red ink in South America, pulled down strong performances in North America and Asia.
In last year’s second quarter, GM made $102-million in Europe before taxes.
European nations are struggling to contain a debt crisis, weak economies and high unemployment, which have sapped car buying in the region.
Even North America, GM’s profit centre, showed weakness.
Pretax profit fell almost 13 per cent to about $2-billion.
International operations, which include China, saw pretax earnings fall three per cent to a $557-million.
Overall revenue slipped five per cent to $37.6-billion.
The company’s overall profit was better than Wall Street expected.
GM earned 90 cents per share, compared with 75 cents forecast by analysts.
Shares rose 31 cents, or 1.6 per cent, to $ 19.97 in pre-market trading Thursday.
Chief Financial Officer Dan Ammann wouldn’t predict when GM would make money again in Europe, saying it was largely dependent on the broader regional economy.
“We don’t know exactly how that’s going to unfold,” he said.
GM is restructuring in Europe and has an array of new vehicles coming out this year and next around the globe.
Ammann said that’s reason for optimism.
“That makes us feel good about the general prospects for the business going forward,” he said.
Still, the company predicted that its third and fourth quarter pretax profits would be comparable to the first quarter, when it made $1.69-billion.