DETROIT -- General Motors today said its net income more than doubled to a third-quarter, post-bankruptcy high of US$2.77 billion, as its focus on retail sales in the U.S. bolstered transaction prices.
GM also generated record revenue for any quarter since its 2009 bankruptcy of US$42.83 billion, up 10 per cent from a year earlier.
“Our record third quarter, led by strong performance in the U.S. and China, reflects our determination to deliver on our commitments,” GM CEO Mary Barra said in a statement. “We will continue executing our plan to deliver earnings that enhance shareholder returns.”
GM posted adjusted earnings before interest and taxes of US$3.54 billion, a fifth consecutive quarterly record post-bankruptcy. It earned an adjusted US$3.5 billion in North America, up 5.9 per cent, while modest losses in Europe and South America canceled out income from international operations and GM Financial.
Strong sales in China -- where deliveries rose nine per cent to a record 2.7 million vehicles -- sent earnings in international operations edging up 0.7 per cent to US$271 million for the quarter.
GM’s adjusted net income, equal to US$1.72 a share, was nearly 20 per cent better than the estimates from Wall Street analysts.
GM’s North American margins declined to 11.2 per cent from 11.8 per cent a year ago. But revenue for the region rose 12 per cent to US$31.1 billion.
Its earnings were boosted by a US$110 million recovery of costs related to its 2014 ignition-switch recalls.
The automaker said it now expects full-year earnings to be “at the high end” of its previous projections of US$5.50 to US$6 a share, or roughly US$8.5 billion to US$9.3 billion.
GM’s earnings in the first nine months of the year totaled US$7.59 billion, more than double the US$3.42 billion posted in the same period of 2015.
GM CFO Chuck Stevens said the automaker generated enough cash to complete a US$5 billion share buyback one quarter sooner than planned.
Despite the strong quarter overall, Stevens said the automaker was now unlikely to meet its goal of breaking even in Europe this year because of fallout from the United Kingdom’s June vote to leave the European Union.
Stevens said that a US$142 million third-quarter loss in Europe -- narrowing from a loss of US$231 million a year earlier -- included a US$100 million hit from the so-called Brexit vote and that fourth-quarter earnings would be cut by US$300 million.
“Breaking even this year is going to be very, very challenging,” Stevens told reporters at GM’s headquarters this morning. “We’re going to take a look across the business and take whatever action is necessary to get the business back on track.”
In North America, Stevens said GM expects to maintain margins of at least 10 per cent even as the U.S. market flattens out and competition intensifies.
Said Stevens: “We’re entering the heart of our product-launch cadence.”