GM's Profit More Than Triples On Strong Asia Sales
DETROIT: General Motors Co's quarterly profit more than tripled, beating expectations, driven by a recovery in the U.S. market and strong sales in Asia.
The U.S. automaker also said on Thursday it expects its full-year adjusted earnings before interest and taxes to show "solid improvement" from 2010 helped by better pricing and lower fixed costs in North America.
Net income in the first quarter rose to $3.2 billion, or $1.77 a share, compared with $900 million, or 55 cents a share, in the year earlier quarter.
Excluding such one-time items as its sales of stakes in parts maker Delphi and Ally Financial, it earned 95 cents a share. That was 4 cents better than what analysts polled by Thomson Reuters I/B/E/S had expected.
Revenue rose to $36.2 billion from $31.5 billion last year. Analysts had expected $35.59 billion.
GM Chief Financial Officer Dan Ammann said GM is set up well to profit from higher gasoline prices with a much more diversified portfolio than three years ago when gas prices last topped $4 per gallon.
"We had a very high, robust April, 19.8 percent market share in April with the lowest incentives we've had as the new company," he told reporters.
Ammann said GM's incentives are currently running slightly below the industry average and that they will be at or slightly below the industry for the rest of the year.
GM was heavily criticized by Wall Street analysts for its lofty incentives in January and February that cut into profit per vehicle. GM cut back incentives in March and April, but still offers more incentives per vehicle sold than its cross-town rival Ford Motor Co, analysts said.
GM's North American operations posted adjusted earnings in the quarter before interest and taxes of $1.3 billion, up $100 million from last year.
It expects those results to improve on average for the rest of the year as better pricing and lower fixed costs more than offset higher commodity costs and more sales of less-profitable vehicles.
GM's European unit broke even on an adjusted earnings before interest and taxes basis and is targeting break-even before restructuring charges for the entire year.
GM's liquidity at the end of the quarter rose to $36.5 billion after the sales of the Delphi and Ally stakes. Cash and marketing securities grew to $30.6 billion from $27.6 billion at the end of the fourth quarter.
(Reporting by Ben Klayman and Bernie Woodall in Detroit; Editing by Derek Caney)
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