GM profit tops estimates on strong truck demand, improved China
By Joseph White and Bernie Woodall
DETROIT (Reuters) - General Motors Co (GM.N: Quote) reported record quarterly earnings for the third quarter, as strong demand for trucks in North America and improved profit margins in China overcame declining revenues.
GM shares rose 5.3 percent to $35.26 a share and have risen more than $5 since the start of the month.
GM posted profit of $1.50 a share in the quarter, well ahead of the $1.18 per share consensus among Wall Street analysts polled by Thomson Reuters I/B/E/S.
GM's robust quarter, which the company said was its best ever, contrasted with disappointing results from other big U.S. manufacturers, which have wrestled with slowing growth in China and the drag on revenues exerted by the strong U.S. dollar.
For GM, a big key to its good quarter was in North America, where cheap gasoline has fueled surging demand for large pickup trucks and sport utility vehicles, segments where GM is dominant.
The automaker generated 72 percent of its quarterly revenue in North America, where profit margins hit a record 11.8 percent.
GM Chief Financial Officer Chuck Stevens said the company expects to hit its goal this year of generating 10 percent profit margins in North America for the full year, a year ahead of its previous forecast.
In China, GM's share of joint-venture profits for the quarter dipped to $463 million from $484 million a year ago, but profit margins rose to 9.8 percent from 9.6 percent, reflecting sales of higher-priced sport utility vehicles and luxury cars. Continued...