Congratulations... ;)...
General Motors Net More Than Doubles to $1.29 Billion on Higher Production
07/16 09:24
General Motors 2nd-Qtr Net Rises With U.S. Production (Update2)
By Alison Fitzgerald
Detroit, July 16 (Bloomberg) -- General Motors Corp.'s second- quarter net income almost tripled as the world's largest automaker built more vehicles in North America and offered discounts to bolster sales.
Net income rose to $1.29 billion, or $2.43 a share, from $477 million, or $1.03, the company said in a statement. Revenue rose 4.4 percent to $48.3 billion from $46.2 billion.
General Motors' North American factories churned out 14 percent more vehicles in the quarter, more than doubling income in the company's largest market. Profit is closely tied to production because automakers book a sale when a vehicle is shipped to a dealer. The company also grabbed more sales of trucks, which carry more profit than cars.
``The volume is up, their market share is slightly higher and their mix is certainly more favorable because they're selling more trucks,'' said Burnham Securities analyst David Healy.
Chief Executive Officer Rick Wagoner offered cash discounts and low-interest loans to keep consumers coming to dealerships. Sales of light trucks rose 8 percent in the first half for General Motors and fell 8.5 percent for closest rival Ford Motor Co.
The automaker's net loss in Europe narrowed to $115 million from $154 million a year earlier because of cost cutting, even as production fell 7 percent. The company had a $73 million loss in Latin America because of slower economies in Argentina, Brazil and Venezuela. Profit in Asia-Pacific rose to $39 million from $12 million led by profits in its Shanghai GM subsidiary.
General Motors shares rose 2.50 euros to 48 euros in Germany this morning. The U.S. shares gained $1.32 to $47.92 yesterday and are down 28 percent in a year.
Outlook
Profit excluding a $55 million charge for a change in European recycling laws was $2.53 a share, the company said. On that basis General Motors was forecast to earn $2.42 a share, the average analyst estimate in a Thomson First Call poll.
General Motors said it expects to earn 80 cents a share in the third quarter excluding any special costs. The company said it expects to write down some of its $2.4 billion investment in Fiat Auto SpA because of losses at the Italian carmaker. General Motors left its full-year profit forecast of $5.60 a share unchanged.
The company's net liquidity -- cash, marketable securities and a short-term retiree health care trust fund, minus debt -- rose by $300 million to $2.6 million in the quarter.
General Motors contributed $2.2 billion to its pension fund and $1 billion to its long-term retiree health-care trust fund.
Pension Fund
The moves helped address analysts' concern that the company's obligations to 450,000 retirees might become unmanageable with a declining stock market. General Motors' shares have declined from $68.17 in mid-May partly as investors fretted about rising pension costs and analysts downgraded the stock.
``They had some reassuring comments on the pension front,'' said David Bradley, an analyst at J.P. Morgan. ``They've done a lot of funding, and the returns are better than we thought, so things look better than we expected.''
The company said it had generated $4.8 billion in cash from its automotive operations in the first half of the year. That, along with $4.6 billion in retail and convertible debt offerings have brought it close to its goal of strengthening its balance sheet by $10 billion this year.
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For every $1 produced by GM... it is the equivalent to $1.80 back into the industrial economic food chain into the US economy...
Even if it is 0% interest loans to less than a 30% percent who qualify with perfect credit... eh???
Best Regards, J.T. |
