{"id":108015,"date":"2016-07-21T08:31:03","date_gmt":"2016-07-21T12:31:03","guid":{"rendered":"http:\/\/www.thedetroitbureau.com\/?p=108015"},"modified":"2016-07-21T08:31:03","modified_gmt":"2016-07-21T12:31:03","slug":"gm-q2-earnings-more-than-double-even-as-sales-slip","status":"publish","type":"post","link":"https:\/\/thedetroitbureau.com\/2016\/07\/gm-q2-earnings-more-than-double-even-as-sales-slip\/","title":{"rendered":"GM Q2 Earnings More Than Double Even as Sales Slip"},"content":{"rendered":"
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GM has been rushing out an assortment of new models, including a remake of the Chevy Malibu.<\/figcaption><\/figure>\n

General Motors saw its second-quarter profit more than double, reaching a record $2.87 billion, the maker announced on Thursday, handily beating Wall Street expectations.<\/p>\n

The surge came despite the fact that GM has seen sales slip in recent months \u2013 even while the overall U.S. car market continues to grow. The results appear to validate the strategy of trimming back on lower-profit rental and other fleet sales in favor of growing the retail side of the sales ledger.<\/p>\n

\"\"<\/a>
Breaking News!<\/figcaption><\/figure>\n

\u201cThis was an outstanding quarter for GM,\u201d said Chairman and CEO Mary Barra. \u201cOur results were generated by strong retail sales in the U.S., record sales in China and a continued emphasis on improving the performance of our operations worldwide. We\u2019ll continue to focus on driving profitable growth and leveraging our technical expertise to lead in the future of personal mobility.\u201d<\/p>\n

Net income for the latest quarter reached $2.87 billion, or $1.81 a share, up from $1.1 billion, or $0.67, a year ago. The consensus forecast by industry analysts polled by FactSet was $1.52 per share.<\/p>\n

Net sales and revenues surged to a record $42.4 billion, up from $38.2 billion for the second quarter of 2015, and would have been about a billion higher, GM said, if not for negative exchange rate trends.<\/p>\n

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GM is one of several makers pushing away from sales to low-profit rental fleets.<\/figcaption><\/figure>\n

The Q2 numbers were strong enough that GM said it was raising its earnings forecast for the full year by 25 cents a share, to between $5.50 and $6.00.<\/p>\n

\u201cWith our aggressive vehicle launch cadence and robust global industry sales, we are confident that we can continue to achieve strong financial performance,\u201d said Chuck Stevens, GM executive vice president and chief financial officer.<\/em><\/strong><\/p>\n

(GM faces some potentially serious legal problems. <\/em>Click Here<\/a> for the story.)<\/em><\/strong><\/p>\n

In recent months, GM has drawn some negative attention due to its weak overall sales numbers. Even while the U.S. market continues to grow, the maker reported its overall volume was down about 2% in June. But a closer look reveals it took a 22% hit in fleet business while direct sales to consumers were up 1%.<\/p>\n

Analysts have long faulted the industry \u2013 especially Detroit\u2019s automakers \u2013 for fluffing up their numbers with excess sales to lower-profit fleets, and daily rental companies, in particular. GM has stuck with a promise to shift its emphasis to retail sales.<\/p>\n

That appears to have been a factor in GM\u2019s strong North American performance for the quarter, the maker setting an EBIT-adjusted record of $3.6 billion, up from $10.8 billion a year ago. And North American margins shot up to 12.1%, compared to 10.5% a year ago.<\/p>\n

(U.S. car sales rebound in June. <\/em>Click Here<\/span><\/a> for more.)<\/em><\/strong><\/p>\n

All told, GM sold 1.44 million vehicles in the U.S. for the first half of 2016. But its largest market remained China, where the carmaker and its partners moved 1.81 million vehicles. Significantly, GM has rebounded in recent months after getting caught up in the overall Chinese market slowdown of the first half of 2016.<\/p>\n

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GM Chairman and CEO Mary Barra expects a strong full year but warns of risks in Europe.<\/figcaption><\/figure>\n

While CEO Barra focused on the U.S. and Chinese markets, GM finally had some solid news to report from Europe, where its long-struggling operations delivered their first profitable quarter in five years. GM has been in the red there since the beginning of the millennium. The unit delivered an adjusted $100 million in earnings after just breaking even during the same quarter of 2015.<\/p>\n

But the long-awaited turnaround of the Opel and Vauxhall operations could be short-circuited by a variety of factors, the automaker warned. In particular, Britain Brexit vote could cut $400 million off of second-half European results due to fluctuations in currency rates and new car demand.<\/p>\n

GM isn\u2019t the only automaker to grow earnings in spite of some serious adversity. At $8.25 billion, Volkswagen AG reported \u201csignificantly higher\u201d operating profits for the first half of 2016, it announced this week, even while setting aside another 2.2 billion euros, or $2.4 billion, to cover the growing cost of its diesel emissions scandal.<\/p>\n

(VW delivers a profitable surprise. <\/em>Click Here<\/span><\/a> for the full story.)<\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

General Motors saw its second-quarter profit more than double, reaching a record $2.87 billion, the maker announced on Thursday, handily beating Wall Street expectations. And the maker is boosting its forecast for the full year, reports TheDetroitBureau.com.<\/p>\n","protected":false},"author":2,"featured_media":91951,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","footnotes":""},"categories":[8],"tags":[],"make":[],"post-state":[],"category_old":[151],"acf":[],"_links":{"self":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/108015"}],"collection":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/comments?post=108015"}],"version-history":[{"count":0,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/108015\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media\/91951"}],"wp:attachment":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media?parent=108015"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/categories?post=108015"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/tags?post=108015"},{"taxonomy":"make","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/make?post=108015"},{"taxonomy":"post-state","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/post-state?post=108015"},{"taxonomy":"category_old","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/category_old?post=108015"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}