The No. 1 US automaker reported yesterday its financial situation following the July to September quarter, where growing demand for its North American models, especially pickups, has driven up the income.
General Motors managed yesterday to report higher-than-expected profit, with GM Chief Financial Officer Chuck Stevens saying that “high transaction prices – the new trucks and SUVs are more profitable than the ones they replace,” was the main reason for the better than expected results.
The positive outcome has been a breath of fresh air for the automaker that has been spiraling down after February’s recall of cars with defective ignition switches. After revealing it had known about the faulty piece for more than a decade, GM was hit by many federal investigations and several billion dollars worth of lawsuits.
Analysts said GM adopted an “Audi-style” profit margin strategy in North America that led to the company reaching a $600 million profit gain in the quarter. Net income went up to $1.38 billion, or 81 cents a share, from $698 million, or 45 cents a share, during the same period last year. Without one-time items, GM made 97 cents a share. The quarter’s special items ($300 million) were related to Russian asset write-downs and the damage took when its Michigan technical center was flooded by a heavy downpour.