“The first two quarters of the year were strong as we fully capitalized on a robust North American industry and maintained our strength in China, despite the challenging conditions in that market”, CEO Mary Barra said in a statement.
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Special items before tax in the quarter included $0.6 billion related to a previously announced currency devaluation in Venezuela, $0.4 billion for asset impairments primarily for GM Thailand, and $0.1 billion for an adjustment to the estimated cost of the ignition switch compensation program.
GM’s North America division recorded $2.8 billion in adjusted EBIT and an adjusted EBIT margin of 10.5%.
“Our plan is generating results and giving us momentum”, said Chuck Stevens, executive vice president and chief financial officer.
So far this year, GM has spent $2.1 billion buying back its shares and has spent $1.1 billion on dividends.
Overall, the company reported a 7.5 percent profit margin, the percentage of revenue it gets to keep. Sales came in at $38.2 billion, down from $39.6 billion the previous year, and lower than the forecast for $40.4 billion.
GM said equity income from the China joint venture rose to $502 million from $476 million a year ago. Analysts polled by Thomson Reuters expected the company to report earnings of $1.08 per share. We expect continued strong performance in these key markets.
Net income rose to $1.1-billion, or 67 cents a share, from $200-million, or 11 cents a share, a year ago, when it was hurt by a big charge relating to recall costs. On a constant-currency basis net revenues were $900 million higher year-over-year.
In its global Operations, which includes China, India, South Africa and the Middle East, GM made $349 million before taxes, up from $315 million in 2014’s second-quarter.
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Shares were up almost 6 per cent in premarket trading on the New York Stock Exchange. Automakers sell about 20 million vehicles a year in China now. Spending on new models won’t slow, Stevens said, but GM will “monitor and time and continue to evaluate” when to add new capacity in the Chinese market.
