GM Reports Record Quarterly Earnings Along With Improved Profit Margins in China

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By Jacob Maslow

General Motors Co. (NYSE:GM) shares rose 4.5% in premarket trading to $35 a share. The automaker reported record quarterly earnings, noting a strong demand for trucks and increased profit margins in China.

The company posted earnings per share of $1.50, up 55% year-to-year. Wall Street analysts expected the company to post $1.18 earnings-per-share, well below the company’s reports.

GM is one of the few automakers that have been able to stay above expectations in a difficult global market. The slowing growth in China as well as a strong US dollar have caused many automakers to miss expectations. The company was able to increase profit margins in China to offset declining revenue in the country.

A majority of the company’s quarterly revenue came from North America. Accounting for 72% of the company’s profit, GM notes a successful quarter due to cheaper gasoline costs. The company’s biggest sellers during the quarter were both trucks and SUVs. GM has a profit margin of 11.8% in North America.

In contrast, the company’s profits in China dropped from $484 million to $463 million year on year. Despite the decline in profits, the company has increased profit margins from 9.6% to 9.8%. Chuck Stevens, GM’s CFO, expects to reach a 10% profit margin in North America for the year. This is a year faster than the previous forecast released by the company.

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