Stuck in neutral
GM reported a 41% decline in its second-quarter profit although a smaller-than-expected loss in Europe helped the company beat analyst expectations. The company earned $0.90 per share while analysts were looking for $0.74. Revenue in the quarter fell to $37.6 billion from $39.4 billion.
In North America, the company reported a $1.97 billion operating profit, helping to offset a $361 million loss in Europe. GM had posted a profit of $102 million in Europe last year, and CFO Daniel Ammann was not able to provide a timetable when European operations will return to profitability.
He said, “We do continue to face challenges in Europe and we are working through that.” Stephen Girsky, head of GM’s European unit said, “We recognize the severity of the declining European market and the impact on the automotive industry. We are working hard on improving variable profit which includes reducing product cost, selling more cars and generating higher profit margins.”
GM’s results illustrate the challenges facing automakers that are benefitting from an improving U.S. market, but continuing to face headwinds in Europe. Ford Motor (F) reported its Q2 results last week, posing a 57% decline in net income, with a $404 million loss in Europe weighing on the bottom line.
General Motors (GM : NYSE : US$19.14), Net Change: -0.52, % Change: -2.64%, Volume: 10,845,885