NEW YORK CITY: General Motors reported on Thursday (Friday in Manila) that quarterly earnings quadrupled on solid sales in the US and China as it pledged better results in the second half of 2015.
The largest US automaker benefited in the quarter ending June 30 from improved profit margins in the key North America region, as well as brisk sales in China despite worries about a slowing economy.
GM chief executive Mary Barra said Thursday’s earnings were “a proof point that we’re doing what we say we’re going to do.”
GM shares jumped 4.2 percent to $31.58 in midday trade.
Earnings for the second quarter were $1.1 billion, up from $278 million in the year-ago period. The 2014 second-quarter earnings were depressed by $1.2 billion in elevated costs for car recalls following an ignition-switch scandal.
Revenue dipped 3.7 percent to $38.18 billion. GM attributed the drop to the strong dollar.
Operating earnings in North America were roughly double that of last year at $2.8 billion, setting a new company quarterly record due in part to robust sales of sport utility vehicles and other large cars in its home market.
The profit margin in North America, by far GM’s largest region by revenues, hit 10.5 percent in the quarter, up from 8.8 percent in the first quarter of the year. Barra has promised to reach a 10-percent profit margin in 2016.
Earnings in GM International Operations, which includes China, rose 10.8 percent to $349 million. GM delivered 823,000 cars in China, up 2.6 percent from a year ago.
GM chief financial officer Chuck Stevens said the company has taken a number of steps to manage the Chinese market through cost cutting, working with dealers to manage inventory levels and boosting output of popular SUV models.
GM owns research and auto parts businesses in China and manufactures vehicles through a number of joint ventures with Chinese companies.
The automaker “will continue to closely monitor” China as growth slows, Stevens said. The company has analyzed downturn scenarios for China, but believes car sales will remain healthy, he added.
“GM expects strong results in China will be sustained through” the second half of 2015, the company said in an investor presentation.