General Motors Co. said its profit fell in the third quarter, but the automaker’s results also demonstrated that its troubled European operations are improving.
GM’s profit fell 53% to $698 million in the quarter compared with the same period a year earlier.
The decline came from weaker earnings in some overseas markets and special charges generated by the repurchase of preferred stock from a healthcare trust for UAW union retirees..
Revenue grew 4% to $39 billion.
“We made gains in the third quarter as we improved our North American margins and increased our global share on the strength of our Chevrolet brand," said Dan Akerson, GM’s chief executive.
The automaker's profit margin in North America hit 9.3%, the highest in two years. GM is trying to inch its profit margin in the region to 10%.
GM’s operating profit in North America grew 28% to $2.2 billion.
“In North America, General Motors has seen its Buick and Cadillac brands continue to post double-digit sales increases, while its mass-market Chevrolet brand has lagged the market’s overall growth,” said Jack Nerad, an analyst with auto information company Kelley Blue Book.
Losses in Europe narrowed to $214 million from a deficit of $487 million. The automaker said it hopes to breakeven in the region by mid-decade.
GM saw profits from its international operation, which includes the key Chinese market, fall 61% to $299 million.
Overall, GM results from regions besides North America were better than expected and dispelled “the potential for a step-back in turnaround efforts outside the U.S.,” said Brian Johnson, an analyst with Barclays Capital Inc.
Meanwhile, Chrysler Group said its third-quarter earnings grew 22% to $464 million. The third quarter was the automaker’s ninth consecutive quarter of positive net income. Revenue grew 13.5% to $17.6 billion, helped by sales of the company’s Jeep Grand Cherokee and Ram pickup trucks.
While the results were good, Kelley Blue Book analysts said that Chrysler still needs to broaden its product range so that it is not so reliant on trucks.
They also noted that the company needs to replace aging models such as the Chrysler 200 and Dodge Avenger.