General Motors today posted a better than expected quarterly profit on strong results in its core North American market and the first revenue increase in Europe in two years.
GM's chief financial officer Dan Ammann said the biggest US car maker's European unit remains on track to achieve its target of breaking even in the next year or so.
"The story in Europe overall is really consistent with the plan we laid out. Our overall objective of getting to break-even by mid-decade, clearly we're well on track toward that," he added.
GM's money-losing European unit has been a key focus for investors since the car maker went public in the autumn of 2010 following a bankruptcy reorganiaation and a $49.5 billion government bailout.
The company has lost money in that region for 13 years in a row.
GM's success in Europe echoed that of its smaller US rival Ford, which last week boosted its full-year profit outlook and painted a brighter picture in Europe.
GM's net income fell to $757m, or 45 cents a share in the third quarter, compared with $1.48 billion, or 89 cents a share, in the year-earlier quarter. But operating earnings rose almost 15% to $2.64 billion.
Excluding one-time items related to the repurchase of preferred stock and tax expenses, GM earned 96 cents a share, 2 cents more than analysts polled by Thomson Reuters had expected.
The results in North America and Europe helped to offset weaker than expected earnings in GM's international operations, which include China and South America. The international earnings fell 61% to $299m as the markets outside China were a drag. Analysts polled by Reuters had expected a profit of $329.2m.
Revenue in the quarter rose 3.7% from last year to $38.98 billion, but that was short of the $39.49 billion analysts had expected.
GM's operating earnings in North America jumped 27% to a better than expected $2.19 billion as the company benefited by $400m in higher vehicle pricing. Analysts polled had expected $2.13 billion.
The loss in Europe fell by more than half to $214m from a loss of $487m last year as GM squeezed out $400m in costs and boosted revenue year over year for the first time in two years. Analysts had expected a loss of $267.7mn.
The European results continued the trend from the second quarter, when the loss was almost one-third smaller than Wall Street expected.
The company's South American profit jumped 79% in the quarter to $284m, much more than the $102.9m analysts had expected.
