GM earnings more than double on U.S. truck demand; shares jump
By Joseph White and Bernie Woodall
DETROIT (Reuters) - General Motors Co (GM.N: Quote) shares rose about 4 percent on Thursday after the automaker reported adjusted net income that more than doubled in the second quarter, driven by North American truck sales and continued strength in China.
Chief Financial Officer Chuck Stevens Thursday reaffirmed the company's forecast that operating profit for the full year would improve from last year's $9.3 billion.
He said the automaker still expects to maintain strong profitability in China, despite slower-than-expected vehicle sales and intensifying price competition in the world's largest vehicle market.
GM shares rose 3.96 percent to close at $31.50 on the New York Stock Exchange.
The recent sharp slowdown in China's vehicle sales prompted some analysts to forecast that GM would have to back away from its forecast of holding profit margins in China at 9 to 10 percent of sales. GM said profit margins in China improved to 10.2 percent from 10 percent a year ago.
"There are lots of levers we can pull" to cut costs and maintain profit margins in China, Stevens said during a briefing with reporters.
GM has committed to spending $14 billion on new vehicles and facilities in China over the next several years. Spending on new models will not slow, Stevens said, but GM will "monitor and time and continue to evaluate" when to add new capacity in the Chinese market.
"Our long term view on China hasn't changed," Stevens said. Within the next 10 to 15 years, China's auto market will grow to 35 million vehicles a year, he said. Automakers sell about 20 million vehicles a year in China now. Continued...