Business

General Motors’ Third-Quarter Profits Fall 15 Percent From Last Year

General Motors Co.’s third-quarter net income fell 15 percent from the previous year, dragged down by losses in Europe and South America and weak earnings in all areas aside from North America and China.

The company’s shares fell 9 percent to $22.80 in morning trading Wednesday, as GM said it would not be able to meet its target of breaking even in Europe this year.

General Motors Profits Fall 15 Percent From Last Year

GM Stock Quote (11/09/2011)

The company said that its net income fell to $1.7 billion in the quarter, or $1.03 per share, compared with $2 billion, or $1.20 per share, a year earlier. Still, the numbers manage to beat Wall Street’s expectations.

Analysts polled by FactSet predicted earnings of 94 cents per share. Revenue rose 7.6 percent to $36.7 billion; analysts had expected $35.9 billion.

One of the reasons GM was able to maintain sales is because of the Japanese tsunami.

“General Motors benefited from Japanese automaker struggles in the third quarter and they were able to boost market share while cutting back on incentive spending. The addition of compelling products like the Chevy Cruze also contributed to their success,” says Edmunds.com Senior Analyst Jessica Caldwell in a recent USA Today report.

But there is a catch.

“With their Japanese competitors re-emerging, GM will have a tougher fight on their hands in the coming months against refreshed and redesigned offerings like the Toyota Camry and Honda Civic,” she added.

GM posted a pretax loss of $292 million in Europe as the economy struggled. Its profit rose slightly in North America to $2.2 billion, but earnings at its international operations, including China, fell 29 percent to $365 million. South American operations also swung to a loss of $44 million for the quarter.

“G.M. delivered a solid quarter thanks to our leadership positions in North America and China, where we have grown both sales and market share this year,” G.M.’s chief executive, Daniel F. Akerson, said in a statement.

“But solid isn’t good enough, even in a tough economy. Our overall results underscore the work we have to do to leverage our scale and further improve our margins everywhere we do business,” he added.

Chief Financial Officer Dan Ammann agreed that the company had a “solid quarter,” but said that GM needs to improve its margin of profit in all regions.

In Europe, Ammann said the company has made “significant progress” and is more than $1 billion ahead of last year’s pretax earnings. However, it still needs to cut out costs across the board and put out the right products that people will buy, Ammann said.

“There’s no one silver bullet,” he said.

GM said it would not break even in Europe this year because of “deteriorating economic conditions there.”

Ammann said the company has an aging car and truck portfolio in South America and is in the process of refreshing it. It also offered buyouts to employees that resulted in a 4 percent cut in the work force there, he said.

To boost profits, GM is coming out with nine new vehicles in the next year in South America, including the Chevrolet Cruze compact and a subcompact named the Cobalt, the company said.

While the company plans to cut costs further, it mainly will boost profit margins by increasing revenue, he said.

“You can’t cost-cut your way to prosperity in the business. You’ve got to grow the business, get the right vehicles on the road,” he said.

The Associated Press contributed to this report.

Comments (42)

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  • MarsBarsTru7
    Posted on November 10, 2011 at 4:53am

    GM should be liquidated. The money from the liquidation should go to pay off GM debt. Any remaining capital should go to taxpayers that did not benefit directly from bailouts. That’s taxpayers – not social engineering benefit recipients.

    No more Government Motors. Eliminate the horrendously restrictive regulations that kill virtually all attempts by smaller businesses to enter the auto industry. Make Ford earn its position in the market.

    Report Post »  
  • capitalismrocks
    Posted on November 9, 2011 at 11:25pm

    I own a GM, love their products, but hate the company, its a huge DISASTER !!!

    GM needs to be broken up into 5 smaller new companies, break the product line up into 5 categories and have these 5 new companies move out of Detroit and disperse and decentralize around the country and compete against one another, innovate, get lean, mean and hungry and do things the right way – risk/reward corporate existence…. the GM bailout failure is right there up with Solyndra, another one of Obama’s “Historical” failures.

    BTW –

    http://www.failedliberalideas.com

    Report Post » capitalismrocks  
  • Ibinaround2
    Posted on November 9, 2011 at 10:16pm

    “You can’t cut your way to prosperity”..True for companies AND true for the idiots that say cutting taxes create jobs…

    Report Post »  
  • cassandra
    Posted on November 9, 2011 at 7:55pm

    Buy a FORD show GM what the American people think of bailouts

    Report Post »  
  • wntsmallgov
    Posted on November 9, 2011 at 7:43pm

    Really? This was a surprise? They have politcians who have no clue about running a business pulling the strings. They need to rename it Government Motors and GE as Government Electric and it will all make sense.

    Report Post » wntsmallgov  
    • beebacksoon
      Posted on November 10, 2011 at 5:07pm

      Should have let them fail with no bailout. Americans can live without one more auto corporation. I will NEVER buy a GM or Chrysler product. Why would I bail them out, then turn around an BUY one of their products (double dipping?) No way, no how – never!
      And isn’t it conflict of interest when there is a bill forcing Americans to buy the curley cue light bulbs (CFLs) from GE (major producer of) and then HIRE Jeffrey Immelt (CEO of GE) to head our Jobs panel? Not only that, HE is producing a product in another country!! Get him outta our government!!

      Report Post »  
  • nohussein
    Posted on November 9, 2011 at 7:40pm

    Good- I wouldn’t buy hussein motors, I’m an American.

    Report Post » nohussein  
  • bama54m
    Posted on November 9, 2011 at 7:09pm

    I am sure,,that thay wont be saying,,that losses were incurred,,due to retooling for the Obamamobile electric fiasco car LOL

    Report Post »  
  • Living In NYC
    Posted on November 9, 2011 at 6:30pm

    Ahhhh…in 2008 I had four Pontiacs…and bought eleven Pontiacs from 1997 to 2007 now I have one.

    They have all been replaced by Fords…Go figure!

    Report Post » Living In NYC  
  • machine1600
    Posted on November 9, 2011 at 6:17pm

    Anything owned by washington will make profit !

    Report Post »  
  • geoteach
    Posted on November 9, 2011 at 5:39pm

    All of you people who are so proud of buying Ford products remember this: Ford profits pay UAW members who pay money into the democrat party which gives us presidents like Obama. It’s a wicked cycle. Buy Toyota!

    Report Post »  
  • SHOESHINEBOY
    Posted on November 9, 2011 at 5:28pm

    cool..awesome..now for another goober mental bail out…gotta keep the onions health care and pen-sions fully funded..

    Report Post »  
  • flfshrmn
    Posted on November 9, 2011 at 5:16pm

    You can’t pay a union guy $60/hr + full health and retirement benies’ to put lug nuts on new vehicles all day long and turn a profit. Out of control wages coupled with a cr@ppy product could contribute to revenue shortages. Profitability isn’t on the business plan when you are Freddy Mac, Fannie Mea or Government Motors. They get paid and bonuses no matter what.
    I smell the hint of another bailout option coming.

    Report Post » flfshrmn  
  • Thevoice
    Posted on November 9, 2011 at 5:06pm

    OK now I will get one of those gps things ..but that’s ok …If the “Conservative” “We the people” would get together ..Seeing as how the system has become corrupted to the soul now ..And start our own bank .. Before the solution to solve all the crises is spoon feed to us to swallow …Take ALL our assets into one bank “WE the conservative controlled money ” you would in fact ..take control of the system …Think about it for a minute …So if 51% of the cash and physical assets of the US were controlled by us at any one time .Politics and fighting a take over like we are seeing is over..If it has come down to money (to people) being the contoling influence instead of the hand of god ..Then take contol of the money. ..Now you can tell me how crazy this is …

    Report Post » Thevoice  
  • thegreatcarnac
    Posted on November 9, 2011 at 4:54pm

    GM ruined itself. It ran itself like it was the government. It had no regard for how much money it was wasting. It made mediocre cars. It built vehicles like it was 1959. It took money from obama’s government and allowed itself to be socialized. It allowed the unions to dictate to it and own a large portion of it. It kowtowed to every leftist special interest group that wanted a kick back and a handout.
    GM is nothing and I do not buy it’s vehicles.

    Report Post »  
  • Tex Expatriate
    Posted on November 9, 2011 at 4:49pm

    GM’s sales fall was also “dragged down” by genuine Americans who won‘t buy their product because they sold out to Obama’s Marxist regime and shafted the stockholders. I see that people still buy GM but I do not personally know one person willing to buy GM, or for that matter Chrysler–for the same reasons. I’m getting ready to buy a new truck but it will be a Ford (F-150 or F-250) or Toyota. Most likely a Ford, however.

    Report Post »  
    • thegreatcarnac
      Posted on November 9, 2011 at 4:57pm

      I have a new Toyota supercab. You should at least test drive one. I think you would like it.

      Report Post »  
    • FireWolf
      Posted on November 9, 2011 at 8:39pm

      I bought a Nissan Titan Crew Cab, and will not look back. In fact, I like several vehicles in the Nissan lineup that I would buy.

      Toyota also makes an excellent truck with the Tundra.

      Report Post »  
  • Tepeyac
    Posted on November 9, 2011 at 4:46pm

    GM still owes be big time for robing my 401k ! I hope the hell they go out of business permanently!

    Report Post »  
  • FireWolf
    Posted on November 9, 2011 at 4:30pm

    Don’t kid yourself FORD lovers, they took a small slice of the government pie too.

    As for GM, it sealed it’s fate when it siphoned off the taxpayer coffers. Any one watch how GM inserted itself into shows like American Choppers, and West Coast Customs.

    It‘s like you can’t get away from the propaganda any where. Those shows used to be about building great custom product, but these days, you have to wonder.

    Report Post »  
  • Thevoice
    Posted on November 9, 2011 at 4:21pm

    People you do realize …The actual auto manufacturing on its own in this country…Would freaking collapse tomorrow. What keeps it alive in this country was and is the billions that the fed has open a window to it’s credit arm…For dummies to get into giant debt or long term high leases on autos and trucks it builds… Good grief…And you wonder why ..Cash is not king anymore ….and things make no sense …Stupid people ..taking large debt from GOVERNMENT RUN LOAN SHARKS …

    Report Post » Thevoice  
    • cessna152
      Posted on November 9, 2011 at 4:28pm

      I was surprised when I was speaking to my niece who works for a mortgage company. We got into a “heated” discussion as she was stating that better and easier loans are on the way. I was like “Huh…come again”?

      She said people with bad credit will get better rates than people with great credit, special financing and NO MORTGAGE HOME INSPECTION. I was like WTF?! I think she was expecting me to say “wow…awesome”.

      Report Post » cessna152  
    • Thevoice
      Posted on November 9, 2011 at 4:45pm

      Yes ..With all the nonsense today it is impossible for us as a individual to know everything that is going on. But when I start to see corporate financing companies (government bailout recipients) and “Banks” better know today as credit card companies ..Again starting to spend millions on TV, mailings, radio, newsprint, magazine …Well then I guess the Obama Czars are hard at work making phone call after phone call . To the people who sold out their soul …Making sure they push money out the door ….Credit is a TOOL .When used wisely can be a benefit …But the government after 9/11 decided to use it as a stimulus program for the country. . Please I would love to know in a totally free market ..What GM would take in cash for a auto ,,,if there was no credit …Every aspect of our economy today has been corrupted ..With FED and Government Loan sharking ..and FED run money laundering …Treasury to bank ..Bank to treasury bonds treasury then can keep writing checks…Great system …Of a massive failure ..

      Report Post » Thevoice  
  • sarg356
    Posted on November 9, 2011 at 4:11pm

    Greedy Motors can keep there over priced cars and trucks. I will drive my older vehicles and take them to a independent owned garage to be repaired.

    Report Post »  
    • LOJ
      Posted on November 9, 2011 at 4:18pm

      Their cars are over priced, and many GM customer are going to Ford who did not take a bailout to get their books in order. GM also cowtows to building the Volt, which is an abysmal seller…People and Families do not want these small Death Traps…They want good stable mid-sized and large vehicles that are less likely to be crushed in an accident or tip over. Freedom of Choice is going to matter very much in the next election, not Government Control!

      Report Post »  
  • williamsteaparty
    Posted on November 9, 2011 at 4:10pm

    This is why I switched to Ford, the only true American auto maker!!!!!!

    Report Post »  
    • LOJ
      Posted on November 9, 2011 at 4:19pm

      You got right, and Ford is making Good Quality vehicles too!

      Report Post »  
  • In detroit
    Posted on November 9, 2011 at 3:45pm

    Good ol government motors , guess its not working out lol told yeah , im bored yawn

    Report Post »  
  • Snowleopard {gallery of cat folks}
    Posted on November 9, 2011 at 3:31pm

    Government motors…any shock it is failing?

    Report Post » Snowleopard {gallery of cat folks}  
    • AJAYW
      Posted on November 9, 2011 at 3:43pm

      I agree with the name (Government Motors) instead of General Motors over the years I bought many at least 14 of their vehicles over the years, starting with a 1969 Z28 when I returned from Nam that year. I will never buy another as long as it is Government Motors

      Report Post »  
  • cobra two
    Posted on November 9, 2011 at 3:23pm

    GM Government Motors. Key word GOVERNMENT. The GOVERNMENT is NOT supposed to be
    in business to make a PROFIT! End of story!

    Report Post »  
  • Cat
    Posted on November 9, 2011 at 3:14pm

    If GM made a profit would the American taxpayer get a dividend?
    NO, but the question would be asked.
    So, they have to post a loss …just to keep everything on the up and up, you see
    (Lots of new Sonatas on the streets … counted 21 on a twelve mile drive)

    Report Post » Cat  
  • Brizz
    Posted on November 9, 2011 at 3:04pm

    The Ford commercial said it all. Who wants to buy a product from a company that got bailed out. Let them fail.

    Report Post » Brizz  
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