General Motors Co.’s (NYSE:GM) second-quarter profit beat analysts’ estimates as the largest U.S. automaker is poised for growth with the one of the biggest waves of new models in its history.
Profit excluding one-time items was 84 cents a share, GM said, exceeding the 77-cent average of 13 estimates compiled by Bloomberg. That compares with 90 cents a share a year earlier. GM rose 1.6% to $37.75 at 9:08 a.m. New York time before regular trading.
Demand for pickups in the U.S. as well as Cadillacs and Buicks in China boosted revenue 3.9%. The growth for GM, along with Ford Motor Co. and Chrysler Group LLC, is further evidence of the industry’s resurgence even after Detroit this month filed the largest municipal bankruptcy in U.S. history.
“We’re just at the very beginning of our new launch cycle here, a lot of the new product is yet to really come into the market at full run rate,” Chief Financial Officer Dan Ammann told reporters today at the company’s Detroit headquarters.
GM’s North American operations reported adjusted earnings before interest and taxes that rose 4.5% to $1.98 billion, the automaker said today in a statement. That exceeded the $1.73 billion average of three analysts’ estimates. Companywide net income fell 23% to $1.41 billion in the second quarter. The company earned $2.59 billion during the first six months.
“We continue to perform well in the world’s two most important markets, the U.S. and China,” Chief Executive Officer Dan Akerson said in the statement. “For the rest of the year, we’ll focus on winning customers with high-quality vehicles at a compelling value.”
The redesigned Chevrolet Corvette and Silverado are among 18 new or refreshed GM vehicles arriving in U.S. showrooms this year. The surge will transform GM’s lineup into one of the newest in the industry from one of the oldest. One of the earliest new offerings, the 2014 Impala, was rated by Consumer Reports today as the best sedan on the market -- a first for a U.S. automaker in at least 20 years.
“I’ve been telling clients for a long time that GM’s stock is cheap today partly because they’re not operating at their full potential,” David Whiston, an analyst with Morningstar Inc. in Chicago, said in a telephone interview.
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