Wednesday, 9 November 2011

GM Q3 Profit Falls 15 Percent to $1.7 Billion With a Loss in Europe

A loss in Europe pulled down GM’s third quarter profit by 15 percent from a year earlier. Its stock dropped 5 percent to $23.88 in premarket trading Wednesday as the company said that it would not be able to avoid a loss in Europe. GM said that as compared to the third quarter last year when it earned $2 billion, or $1.20 per share, its earnings in the same period this year was $1.7 billion, or $1.03 per share.

In spite of the decline, it was GM’s seventh straight quarterly profit and well ahead of Wall Street’s expectations. FactSet analysts had predicted an earnings of 94 cents per share. Against analysts’ expectations of $35.9 billion, its revenue went up to $36.7 billion.

In Europe, GM reported a pre-tax loss of $292 million because of the struggling economy. It performed much better in North America where its profit rose slightly to $2.2 billion. However, in its international operations including China, its earnings dropped 29 percent to $365 million.

Dan Ammann, GM’s chief financial officer said that although the company performed well in the quarter, there is need to improve margin of profit in all areas. The company is more than $1 billion ahead of last year’s pre-tax earnings in Europe but there is need to reduce costs in all spheres of activity and offer the right products that consumers will buy.

Read More : GM Q3 Profit Falls 15 Percent to $1.7 Billion With a Loss in Europe

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