GM Earnings Fall 53% on Special Items

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Renaissance Center Light Bands (The General Motors logo and a blue light band are displayed atop the Renaissance Center in Detro
Carlos Osorio/AP
By TOM KRISHER

DETROIT -- General Motors' third-quarter net income fell 53 percent compared with a year ago, as one-time expenses masked a strong performance in North America and a narrowed loss in Europe.

The company earned $698 million in the quarter, or 45 cents a share. That compares with $1.48 billion, or 89 cents a share, a year ago. But without $900 million in one-time items, GM earned $1.7 billion, or 96 cents a share. That beat Wall Street expectations. Analysts polled by FactSet expected 94 cents a share.

Revenue rose 4 percent to $39 billion, just short of Wall Street's estimate of $39.2 billion.

Investors viewed the results favorably. GM (GM) shares rose 87 cents, or 2.4 percent, to $36.93 in morning trading.

GM's performance in North America was especially strong, with pretax earnings up 28 percent to $2.2 billion on solid pickup truck sales and better pricing. GM rolled out updated versions of its Chevrolet Silverado and GMC Sierra pickups in the spring.

The company's profit margin in North America -- the percentage of revenue it gets to keep after expenses -- was the highest in two years at 9.3 percent.
GM has a goal of 10 percent pretax margins in the region.

"The new trucks are doing great in the marketplace," Chief Financial Officer Dan Ammann said. "We're commanding good pricing. We're controlling costs."

GM's average sales price rose 1 percent in the U.S. during the quarter to $34,566, according to Kelley Blue Book. Sales of the Silverado, its top-selling vehicle, were up 14 percent over last year's third quarter. Prices for the pickup rose by 2 percent to an average of $36,487.

In Europe, GM cut its loss by more than half to $214 million. Revenue there rose year-over-year for the first time in two years. Ammann said the company cut $400 million in costs during the quarter, and updated versions of its Opel Mokka small crossover SUV, Adam subcompact and Insignia midsize car sold well.

GM's International Operations, including Asia, saw pretax earnings fall 61 percent to $299 million due to struggles in India and other areas outside of China. South American profit rose 79 percent to $159 million. The company's financial unit saw a 20 percent rise in pretax earnings to $239 million.

"We continue to have challenges in some markets," Ammann said. Some are due to industrywide issues such as competitors lowering prices, but some are execution problems on GM's part, he said.

South American profit rose 79 percent to $284 million. The company's financial unit saw a 20 percent rise in pretax earnings to $239 million.

One-time items included $800 million to buy preferred stock from a health care trust for union retirees and a $48 million impairment charge in South Korea.


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17 Comments

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forkliftman53

and how much did the govt buy

October 30 2013 at 6:06 PM Report abuse -2 rate up rate down Reply
hanker46

They have paid back all but 7%. GM will be just fine.

October 30 2013 at 4:10 PM Report abuse +5 rate up rate down Reply
bolten2

Think what the profit would be without government involvement and dumping losing electric vehicles.

October 30 2013 at 3:21 PM Report abuse -5 rate up rate down Reply
drakkusshadows

Since Ford's quality has been continuing to decline, more people are buying other American cars. I know Ford was never known for quality, but they've really upset many of their customers. I know I will never buy another Ford ever again.

October 30 2013 at 12:59 PM Report abuse +3 rate up rate down Reply
tmoschetti

Does this mean they will FINALLY pay back the BILLIONS they owe the taxpayers. As of one year ago that number was $26 BILLION dollars. Their break even share price is $54. The share price today is $37.

Guess which other of Obama's "protected" welfare recipients haven't paid back the bailout money. Fannie Mae and Freddie Mac, both exempted from the Dodd-Frank financial regulation bill. They BOTH still have their hands in the till.

Oh, and almost every other institution that got bailout money has paid it back, but Obama being the scofflaw that he is, has refused to return those funds to the Treasury as was written into the bill by Senator Gregg.

October 30 2013 at 12:49 PM Report abuse -4 rate up rate down Reply
Mingo

Thats nice but when are they going to pay back the 45billion plus they owe the american tax payer

October 30 2013 at 12:20 PM Report abuse -6 rate up rate down Reply
rjen164497

Easy, they haven't paid back the American Taxpayers. They haven't settle with the Bond holders they screwed with Obama's help. Now they are going to China with Americans money.

October 30 2013 at 11:42 AM Report abuse -5 rate up rate down Reply
posthuf

Wait ... wait ... wait ...

One heading says, "GM beats Wall Street expectations," and another "GM Earnings Fall 53% on Special Items"

So which is it? Did Gubmint Motors make make or break?

Either way, they're subsidized by YOUR tax dollars (stimuless), and their product for the most part has been purchased by government agencies and offices - also with YOUR tax dollars.

That SHOULD tell you that no matter if they exceed WS or drop, it's still out of YOUR pocket, and it means nothing to Mr. & Mrs. Joe Everyday Guy.

October 30 2013 at 11:21 AM Report abuse -6 rate up rate down Reply
calderasf

Aren't we all glad we didn't take the repubnut "let them fail" approach to the company that creates 100s of thousand of middle class jobs. Every earnings report is proof Obama was right.

October 30 2013 at 11:21 AM Report abuse +6 rate up rate down Reply
1 reply to calderasf's comment
John Perry

Don't you remember this is the Company who donates great sums to the democrats and obama, their CEO, Jeffery Immelt, is a close personal friend of obama, was obama's JOB CZAR WHO SHIPPED THOUSANDS OF GE JOBS TO CHINA AND THEN FIGURED HOW TO SEE GE PAID NO INCOME TAX.

October 30 2013 at 4:17 PM Report abuse -3 rate up rate down Reply
1 reply to John Perry's comment
elendil3136

When did Jeffery Immelt become CEO of GM? I must have missed that announcement.

October 30 2013 at 5:37 PM Report abuse +4 rate up rate down
jacknaber

I thought there stock would have been hire since 70 percent of their cars are made in china now . go to youtube and look it up the cro of gm talks about the 7 new plants they built over there in 2010 funny right after the bailout

October 30 2013 at 11:07 AM Report abuse -8 rate up rate down Reply
1 reply to jacknaber's comment
calderasf

Completely false

October 30 2013 at 11:21 AM Report abuse +7 rate up rate down Reply