During the first quarter GM managed to reduce it loss in Europe and report profit in North America.
GM’s stock increased 3.3% to $31.16, the automaker’s highest closing price since July 2011. Net income during the first quarter reached $865 million, a decrease of 14% from last year and revenue dropped3% to $36.9 billion. In Europe GM reported a loss of $175 million, from $294 million last year, less than analysts’ predictions of more than $460 million.
“We’re a very healthy company that’s getting stronger each quarter, and in the product arena we’re playing offense and competing to win,” GM CEO Dan Akerson said in a conference call. “There’s a new vitality here at GM, and it’s represented at all of our brands.”
But GM’s main profit engine remains North America, with a pre-tax operating profit of $1.4 billion, a decrease of 12% from $1.6 billion in 2012. Marketing and manufacturing costs were driven up by the introduction of the all-new large pickups which will go on sales in several weeks.
GM CFO Dan Ammann said that the company’s performance in North America was reduced due to the new Chevrolet Silverado and GMC Sierra pickups, but the company managed to regain market thanks to the Cadillac ATS and Buick Encore strong performance, with sales up 17.7% and 17.2% respectively in Q1.
Profit in GM’s International Operations reached $495 million, down from $521 million in 2012. GM plans to reach the break-even level in Europe by 2016, although Jefferies analyst Peter Nesvold believes that the company’s might miss its target due to the tough situation in the region, which shows no sign of recovery.
“We’re pleased with our progress, but we’re still losing money in Europe — a lot of it,” Akerson said. “We have to match production with demand, but we also have to reduce costs in everything that we do.”
Source: Detroit Free Press