General Motors earned $1.4 billion in the third quarter, nearly doubling its year-earlier performance, and beat Wall Street expectations, as North America remains consistently profitable and sales grew in China.
The net income translated to 97 cents per share, while the consensus of analyst estimates had been for 95 cents.
Revenue rose slightly (0.7 percent), to $39.3 billion from $39 billion a year earlier.
GM shares rose in early trading Thursday morning, but slipped in the afternoon to close down 1.2 percent at $30.93.
“We reaffirmed our near-term financial targets, and we are aiming for 9.5 percent to 10 percent (profit) margins,” CEO Mary Barra said. “I know there’s a show-me attitude out there. We understand we have a lot of work to do, and we are on it.”
Again, North America was the profit driver, posting before-tax earnings of $2.45 billion, and a profit margin of 9.5 percent. The number of vehicles sold in the U.S., Canada and Mexico rose 9.4 percent from a year earlier.
Those vehicles are selling at higher prices. In September, the average selling price across GM’s four U.S. brands was $37,206, 4.5 percent higher than a year earlier, according to Kelley Blue Book.
Like most of its competitors, GM is benefiting from the growth of pickup truck and SUV sales. Those tend to generate bigger profits than small and midsize passenger cars.
“The new trucks and SUVs are more profitable than the ones they replaced. That certainly helps from a profit perspective,” said Chuck Stevens, GM’s CFO.
This was the first quarter this year without a major charge for GM’s record number of vehicle recalls that now exceeds 30 million for the year.
“We will continue to pay the repair costs on the recalled vehicles through the middle of next year,” said Stevens. In a conference call with analysts, he said there were more than $700 million in recall-related costs, but they had been accounted for in a previous quarter.
Barra said dealers have repaired 1.2 million of the 2.6 million cars recalled for a defective ignition switch.
GM’s loss in Europe grew to $387 million from $238 million a year earlier, reflecting a $200 million charge related to restructuring in Europe, where it has set a goal of making a profit by 2016.
In Russia, the company took impairment charges of $194 million related to its Russia operations. Stevens said GM has cut production to one shift at a factory in St. Petersburg, and installed a new management team.
In South America, it almost broke even, losing $32 million, which was an improvement from the first half of the year.
The company’s cash flow fell by $800 million, primarily due to an extra, but scheduled payment to suppliers, that was not part of the year-earlier quarter.