By Jui Chakravorty
DETROIT (Reuters) - General Motors on Tuesday said it swung to a quarterly profit that trounced Wall Street estimates as it benefited from cost-cutting and growing sales overseas, sending its shares higher.
GM posted a second-quarter profit of $891 million (438 million pounds) against a massive $3.4-billion loss a year ago, bolstered by gains in Europe, Latin America and Asia, sales of higher-margin vehicles and a one-time, tax-related gain.
The automaker also sharply narrowed its losses in its troubled home market, but vowed to keep the pressure on costs, the overriding issue in a crucial round of ongoing labour talks with its major union.
Despite signs of recovery for the No. 1 U.S. automaker, analysts said GM would face a tough second half as stiff competition and a weak U.S. housing market raise the stakes for automakers to roll out new sales incentives.
Shares of GM were up 1 percent at $32.91 in afternoon trade on the New York Stock Exchange, off early gains that sent the shares up as much as 6 percent.
Excluding some one-time items such as charges related to the bankruptcy of parts supplier and former subsidiary Delphi, GM said it had earned $2.48 per share.
Those adjusted earnings included 19 cents per share in earnings from subsidiary Allison Transmission, which GM is spinning off in a deal expected to close this quarter. The headline figure also included a $401-million gain as GM reversed previously booked tax liabilities. read more...
Source:
http://business.scotsman.com/latest.cfm?id=1196702007
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