“We are committed to sustaining 10-percent margins in North America over the next number of years, and to the extent that there’s headwinds associated with the final resolution of the contract negotiations, we will work to offset those”, he said during an interview on “Squawk Box”.
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General Motors’ third-quarter profit fell slightly, but the company rode strong North American sales to overcome $1.5 billion in costs from its deadly ignition switch recall. GM’s global market share also edged down to 11.2 percent from 11.6 percent previous year. GM said its margin for the year would surpass 10 percent, ahead of its goal of sustaining that level in 2016.
The Detroit automaker’s net income slipped 1.4 percent to $1.36 billion, or 84 cents per share. The average estimate of eight analysts surveyed by Zacks Investment Research was for earnings of $1.18 per share. Net revenue of $1.7 billion was a record for the unit.
Ms. Barra has been at GM’s helm more than 20 months and only recently is emerging from an ignition-switch crisis that has clouded much of her tenure. “We’re working extremely hard to make sure we deliver on what we say we’re going to do”.
A majority of the company’s quarterly revenue came from North America.
“We have long argued that investors underappreciated the new management discipline, and we see that paying off in successful product initiatives … accelerated cost-reduction efforts and quick moves to stabilize China”, Johnson wrote. Shares have traded as low as $24.62 and as high as $38.99 over the past year. The automaker’s sales growth has slowed considerably in China -what has been its largest sales market the past several years – and has been challenged by stalling sales in Brazil.
GM said its North American performance was also helped by a reduction in logistics and materials costs.
In short, that fourth-quarter profit would need to be $700 million to generate the same payment as a year ago. He reiterated that GM will turn a profit in Europe next year.
Losses widened in South America, as sales volumes plunged amid the continent’s economic troubles.
The company’s Chief Financial Officer Chuck Stevens said early in 2015 that the company has the capacity to sustain profits in China amidst the slowdown of the market.
Earlier this year, GM had said it expected to see a year-over-year profitability gain in South America but it has backed off that statement given macroeconomic conditions.
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GM’s worldwide region, which includes the Middle East, Africa and most of Asia, posted a modest increase in profit to $269 million from $259 million, but losses in South America widened to $217 million from a $32 million deficit a year ago.
