Watch LIVE

Morning Market Roundup: GM Third Quarter Profits Down, PVH Corp. in $2.9B Deal, EU Unemployment at All-Time High (Again)

News

Here’s what’s important in the business world this morning:

GM: General Motors announced third-quarter profits fell by 12 percent, the automaker announced on Wednesday.

GM said it earned $1.5 billion from July through September, down from $1.7 billion a year earlier. The company earned 89 cents per share compared with $1.03 in 2011. Revenue grew 2.5 percent to $37.6 billion.

Excluding one-time items, GM made 93 cents per share, beating Wall Street expectations of 60 cents.

That drove GM shares up $1.05, or 4.5 percent, to $24.33 in premarket trading.

Chief Financial Officer Dan Ammann said the company had solid profits in South American and internationally outside of China, showing that its moves to fix the business are working.

"We can make those improvements and deliver the results," he said.

The company also predicted its fourth-quarter pretax earnings would be about the same as last year's $2.2 billion, and it expects to break even in Europe by the middle of the. GM expects a full-year European pretax loss of $1.5 billion to $1.8 billion in 2012, improving slightly in 2013. The company lost $747 million in Europe last year.

GM lost $478 million pretax in Europe, compared with a $292 million loss a year earlier. In North America, pretax profits fell 17 percent to $1.8 billion as lower pension income and higher costs for warranty claims offset lower raw material and freight costs.

But in South America, the company swung from a $44 million loss last year to a $114 million profit. And GM's international operations, fueled mainly by areas outside of China, nearly doubled its pretax profits to $689 million.

EU Unemployment: Unemployment in the 17-country eurozone hit a record high of 11.6 percent in September, official figures showed Wednesday.

The rate reported by Eurostat, the EU's statistics office, was up from an upwardly-revised 11.5 percent in August. In total, 18.49 million people were out of work in the eurozone in September, up 146,000 on the previous month, the biggest increase in three months.

With the eurozone economy fading, most economists think unemployment will keep increasing over the coming months and that the deteriorating economic picture will soon spook investors again after a brief hiatus.

Five countries in the eurozone are already in recession - Greece, Spain, Italy, Portugal, and Cyprus - and others are expected to join them soon.

PVH: PVH Corp., whose brands include Calvin Klein and Tommy Hilfiger, has agreed to buy rival clothier The Warnaco Group Inc. in a cash-and-stock deal worth about $2.9 billion that will create one of the world's largest clothing companies.

The Warnaco Group Inc. already sells Calvin Klein under a license and brands such as Speedo, Warner's and Olga.

PVH said Wednesday it will pay Warnaco shareholders $51.75 in cash and a portion of its stock for each Warnaco share. That puts the total per-share value at $68.43, a 34 percent premium over the company's closing price on Friday, the last day markets were open before storms battered the East Coast.

U.S. Futures: Stock futures rose Wednesday, the first day of trading this week after Hurricane Sandy shut down Wall Street and darkened a broad swath of the East Coast.

Global markets remained relatively buoyant while U.S. financial markets were shut down, and they rose again ahead of the opening bell on strong earnings from automakers in Europe and the U.S., and also on quarterly results from European airlines.

Dow Jones industrial futures rose 47 points to 13,101. The broader S&P futures tacked on 7.7 points to 1,415.30. Nasdaq futures rose 8.25 points to 2,667.25.

The Associated Press contributed to this report.

Most recent
All Articles