GM boosts full-year outlook after record second-quarter profit
By Bernie Woodall and Joseph White
DETROIT (Reuters) - General Motors Co (GM.N: Quote) on Thursday raised its forecast for full-year profits after reporting a record second-quarter profit as it continued to capitalize on strong sales of pickup trucks and sport utility vehicles in the United States.
The earnings handily beat Wall Street expectations, sending shares up as much as 4.4 percent.
The world's third-largest automaker said it expects adjusted earnings before interest and taxes of $5.50 to $6.00 per share for 2016, up from a previous expectation of $5.25 to $5.75 per share.
Second-quarter net income rose to $2.87 billion, or $1.81 a share, from $1.1 billion, or 67 cents a share, a year ago. Factoring out a $100 million charge for legal costs, GM earned $1.86 a share in the latest quarter, well ahead of the $1.52 consensus forecast among analysts.
More than 90 percent of the company's pretax profits came from North America, where profit margins rose to 12.1 percent from 10.5 percent a year before, driven by demand for pickup trucks and large sport utility vehicles.
GM also reported its first quarterly profit in Europe in five years, but warned that currency and market disruptions caused by Britain's decision to quit the European Union could force the automaker to slash up to $400 million in costs from second-half results in Europe.
GM Chief Financial Officer Chuck Stevens said "everything is on the table" as the company looks for ways to offset Brexit-related costs. He said the company has not given up on its goal of breaking even in Europe for the year, and described Brexit as "a speed bump along the way."
GM has four pickup truck and one large-SUV plant in North America, all running around the clock producing at more than 100 percent of planned capacity, a spokesman said. The rate is higher than the company's sedan plants, some of which have been down to prepare for new products. Continued...