The No 1 US automaker also maintained its earnings outlook for 2017 despite falling revenue.
Shares were up 0.8% at $36.12. GM chief financial officer Chuck Stevens cautioned in a call with analysts that production of its profitable large pickup trucks in North America could fall by 10% in 2018 as a new generation of trucks is launched.
However, Stevens said GM could maintain 10% pre-tax profit margins in North America if overall sales remain close to 17mn vehicles a year.
The results excluded nearly $800mn in losses from the company’s European operations, which are being sold to France’s PSA Group. GM reported second-quarter net income of $2.4bn or $1.60 per share, down from $2.8bn or $1.74 per share a year earlier. Excluding one-time charges, earnings per share of $1.89 beat analyst estimates of $1.69.
Revenue for the quarter was $37bn, down from $37.4bn a year earlier and below the $40.1bn expected by analysts.
Wall Street is concerned the US auto industry is entering a downturn after several years of strong sales.
Automakers have reported declining sales for the past four months. The company said second-quarter US dealer inventories jumped 273,000 versus the same period in 2016. GM plans to cut North American production by 150,000 vehicles in the second half of 2017 from the first, CFO Stevens told reporters.
Interpublic
Advertising company Interpublic Group yesterday reported surprisingly weak quarterly results, hurt by tepid client spending in the United States.
Shares of New York-based Interpublic, one of the world’s “Big Four” advertising companies, plunged as much as 16% after the company also said it expects annual organic revenue growth at the low end of its forecast.
“Client spending in the quarter reflected increased caution, but we don’t see evidence of a broad-based economic downturn.” Interpublic chief executive Michael Roth said in a statement.
Ad companies in recent years have benefited from explosive growth in digital advertising, particularly in social media ad campaigns, at the expense of traditional print and TV ads.
But Interpublic lost business from the telecom and financial services industries in what it called an unusually soft quarter for the digital business, contributing to the first quarterly decline in its US revenue in over two years.
International sales also slipped, declining 3.3% to $724.4mn.
Net income fell to $94.7mn, or 24 cents per share, from $156.9mn, or 38 cents per share, a year earlier. Total revenue slipped 1.7% to $1.88bn in the second quarter, missing analysts’ estimates of $1.95bn. Interpublic said it now expects 2017 organic revenue growth at the lower end of its 3% to 4% forecast.
