U.S. demand for trucks, other vehicles drives strong GM profit
By Ben Klayman and Deepa Seetharaman
DETROIT (Reuters) - General Motors Co (GM.N: Quote) on Wednesday posted a better-than-expected third-quarter profit as the U.S. automaker's new lineup of pickup trucks and other revamped models boosted North American results.
While GM's China operations remained stable, profit margins in the core North American market hit a two-year high on the strength of vehicles like the Chevrolet Silverado pickup and Impala sedan which allowed GM to boost pricing by $400 million.
Like its smaller U.S. rival, Ford Motor Co (F.N: Quote), GM also offered a more optimistic picture of Europe, where the company's revenue rose for the first time in two years.
GM's shares rose as much as 4.1 percent, the largest one-day percentage gain in nearly two months. They were still up 3.4 percent at $37.27 late on Wednesday afternoon on the New York Stock Exchange.
Europe has been a focus for investors since GM went public in November 2010 following its bankruptcy reorganization and a $49.5 billion government bailout in 2009.
GM Chief Financial Officer Dan Ammann said the No. 1 U.S. automaker's European unit remains on track to achieve its target of breaking even in the next year or so. GM has lost money in Europe for 13 straight years.
"The story in Europe overall is really consistent with the plan we laid out," he told reporters. "Our overall objective of getting to break-even by mid-decade, clearly we're well on track toward that."
Excluding one-time items, GM earned 96 cents a share, 2 cents more than analysts polled by Thomson Reuters I/B/E/S had expected. The quarter included charges related to the repurchase of preferred stock and an impairment of goodwill in the company's South Korean operations. Continued...