CORRECTED-UPDATE 1-GM profit beats on strong U.S. demand, smaller loss in Europe
(Corrects net income in 3rd paragraph to $1.2 billion, not billion million, vs year-earlier $1.5 billion, not million)
By Ben Klayman and Deepa Seetharaman
DETROIT, July 25 (Reuters) - General Motors Co on Thursday posted a higher-than-expected quarterly profit on strong demand in North America and cost-cutting in its struggling European business.
Europe, where industry sales hit a 20-year low in the first half, remains "very challenging," GM Chief Financial Officer Dan Ammann told reporters. He added it was too soon to call any sort of improvement there.
GM's net income in the second quarter fell to $1.2 billion, or 75 cents a share, from $1.5 billion, or 90 cents a share, a year earlier.
Excluding one-time items, mostly related to the acquisition of preferred shares in GM Korea, the automaker earned 84 cents a share, 9 cents above the average forecast of analysts polled by Thomson Reuters I/B/E/S. GM shares were up 2 percent in premarket trading.
Revenue rose 4 percent to $39.1 billion, above the $38.37 billion analysts had expected.
In May GM reported a stronger-than-expected first-quarter profit as it kept a tight grip on costs in its North American and European businesses. That grip was still in place in the second quarter in Europe, where the company cut $400 million in costs compared with a year earlier. Ammann said GM continues to be aggressive in those efforts.
GM's North American business had operating earnings of almost $2 billion in the latest quarter, easily topping the $1.75 billion that nine analysts polled by Reuters had expected. Ammann said the U.S. market remains robust, but GM declined to raise its full-year forecast for industry-wide U.S. sales. Continued...