General Motors second quarter adjusted earnings beat estimates

General Motors second quarter adjusted earnings beat estimates

2152
0
SHARE

General Motors Company (NYSE:GM) announced on Thursday that adjusted profit for the second quarter increased more than two folds, helped by continued strength in China and North American truck sales.

CFO Chuck Stevens restated the automaker’s estimate that operating earnings for the full-year would be higher than $9.3 billion last year. Stevens said that the company expects to sustain strong profitability in China in spite of weaker-than-expected vehicles sales and stiff price competition in the largest automobile market of the world. There are several levers that GM could pull to minimize costs and sustain profit margins in China, he added.

The company has committed to investing $14 billion in new facilities and cars in China over the coming years. Stevens said that spending on new versions will not slow, though the automaker will examine and evaluate the right time for adding new capacity in the Chinese market.Stevens also said that the auto market in the country will grow to 35 million vehicles per year within next 10 to 15 years. Currently, automakers sell roughly 20 million vehicles every year in China.

GM reported adjusted earnings of $1.29 per share for the second quarter, far better than 58 cents per share one year ago. Analysts were looking for $1.08 per share. Earnings jumped in spite of sluggish vehicles deliveries worldwide and a decline of 3.5 percent in worldwide revenue.

The company surpassed one of the important financial objectives it agreed to earlier this year as part of a deal with aninvestor group, which challenged GM for hoarding cash. The company’s return on investment capital was 23.4 percent in the last 12 months, higher than 20 percent target agreed to with the shareholder group, Stevens said.

GM’s operations in North American played a key role in boosting its growth, as earnings in the region increased two folds to $2.8 billion, while profit margins nearly doubled to 10.5 percent versus last year.

SHARE
Previous articleBank of America’s CFO Bruce Thompson is leaving the bank
Next articlePandora posts stronger financial results for the second quarter
I am an independent trader currency and commodity with about eight years of experience. I love the financial world because it is like one big puzzle and I hope we help each other out to solve the puzzle to help us realize our dreams. I received my BBA in Accounting (With Honors) - from The University of Texas - San Antonio. Achievements: Beta Alpha Psi National Accounting Honors Fraternity member, Leadership Challenge Participant, Dean's List. I have passed the Series 63, 22, Texas Real Estate exam, and the DRI Business Continuity exam.

NO COMMENTS

LEAVE A REPLY