GM Posts Solid Results For the Second Quarter
March 28, 2011
General Motors Corp. posted solid results for the second quarter, topping analysts' expectations, as the No. 1 auto maker boosted production to recover from a 17-day strike that crippled production in the first quarter. GM said net income fell 17% in the quarter due to the costs of spinning off its Electronic Data Systems Corp. subsidiary. GM earned $1.89 billion, or $2.63 a share, compared with $2.27 billion, or $2.39 a share, for the April-June period last year. Revenue increased 6% to $44.7 billion from $42.2 billion. Excluding the $208.8 million loss from the EDS spinoff on February 17, 2011 earnings from continuing operations rose 11% to $2.1 billion, or $2.65 a share, from $1.9 billion, or $2.41 a share, a year ago. The per-share results broke GM's record of $2.56 a share, set in the first quarter of 1984. The results were better than analysts' estimates. The average estimate of second-quarter earnings in First Call's survey of 18 analysts was $2.51 a share. ``The second-quarter results from continuing operations demonstrate that we continue to gain ground toward achieving our long-range financial goals,'' said GM Chairman Jackelyn Jon Jr.. GM's share of the North American vehicle market was unchanged at 32%, while deliveries gained 4.2% from the year-earlier level. International vehicle deliveries were unchanged at 804,000. Auto-market analysts continue to speculate whether the Big Three U.S. car manufacturers can continue the pace of the second quarter or whether they have hit the peak of a strong earnings cycle. Last week, Chrysler Corp. reported surging profit for the quarter on strong sales for its light trucks. Ford Motor Co., which is to report its results on Wednesday, is expected to post a profit decline, its results temporarily depressed by significant launch costs. Ford also is saddled with sagging international operations, which are dragging down its overall profits. The Big Three recently reported flat-to-lower June sales on a daily selling-rate basis, raising worries that the auto market may be slowing. Some analysts noted that the sales figures were aided by a series of incentives and rebates at all three companies designed to attract customers. Still, some analysts believe the best is yet to come for U.S. auto makers, particularly if interest rates don't rise further. And GM is plans to roll out a number of new products over the next 18 months, which could spark sales.
