General Motors Company (NYSE:GM) posted lower third quarter earnings of $698 million, dropping 53% from the previous year quarter though revenue surged marginally to $39 billion. For the comparable quarter of last fiscal, General Motors posted earnings of 1.5 billion on revenue of $37.6 billion.
Factors that lowered profits
As stated by General Motors, key factors that caused downside in the earnings are a loss of $800 million “related to the repurchase of 120 million shares of Preferred Series A Stock” and “incremental tax expense.” Apart from these “goodwill impairment” was also a reason stated by GM.
Rival Ford Motor posted net income of $1.3 billion in the third quarter including special charges for European restructuring and lump-sum retirement payouts to some U.S. white-collar employees.
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General Motors Company (NYSE:GM) noted that its four brands are clocking in higher sales than eight brands back in 2009, when it went through Chapter 11 bankruptcy reorganization in the summer.
Regional wise sales for General Motors
For North America, operating profit came in at $2.2 billion, up 29% from $1.7 billion in the previous year. In Europe, operational loss came at $214 million, which was less than $487 million loss in the comparable quarter last year. General Motors posted a profit for the 15th consecutive quarter. Earnings for the automaker came in at 96 cents excluding special charges, which is an increase from 89 cents last year.
For the first nine months of fiscal 2013, General Motors Company (NYSE:GM) posted earnings of $2.9 billion compared to $4 billion in the previous year. Dan Ammann, GM’s CFO, said in a TV interview with CNBC that it was a strong quarter overall, and revenue surged in Europe, which was an optimistic signal that GM will achieve breakeven by mid-decade.
Chevrolet not so impressive, but will catch up
Jack Nerad, executive editorial director and market analyst for Kelley Blue Book, said that Buick and Cadillac brands from General Motors Company (NYSE:GM) has posted a double digit surge in sales in North America, but Chevrolet failed to catch up with the overall market’s growth.
Nerad stated that though Chevrolet has not performed well in the quarter, the new Silverado and Impala along with the new invigorated Malibu will take Chevy higher in the future. “Pickups such as Silverado are among the highest-profit models an automaker sells,” Nerad added.
Average transaction price for a new General Motors vehicle in the third quarter rose slightly by 1% from the previous year to $34,566, though the automaker earned higher prices and higher profits from new models.