Tags: gm | earnings | second quarter | q2 | two billion dollars

GM Earnings of $2.9 Billion Are More Than Double Last Year's

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By    |   Friday, 22 Jul 2016 10:55 AM

General Motors reported record second-quarter earnings of $2.9 billion on Thursday, well over twice the amount compared to the same time period a year ago.

"This was an outstanding quarter for GM," chairman and CEO Mary Barra said in the company's earnings release. "Our results were generated by strong retail sales in the U.S., record sales in China and a continued emphasis on improving the performance of our operations worldwide."

The report marks the company's best financial quarter since emerging from bankruptcy seven years ago, The Wall Street Journal reported.

Earnings per share for the quarter rose 44 percent to $1.86 compared with $1.29 for the same period last year. The company raised its outlook for the full year, anticipating full-year earnings per share of $5.50 to $6, compared with its previous estimate of $5.25 to $5.75.

CFO Chuck Stevens called Brexit a "potentially significant headwind," noting that fallout from the UK's vote to leave the European Union could hamper earnings in the second half of the year by as much as $400 million.

"This is a speed bump along the way that we’re going to deal with," Stevens said.

Low gas prices and easy access to credit have boosted traditional auto business in North America, the Detroit Free Press reported. But investments in self-driving cars, ride-sharing and car-sharing remain a wildcard in the industry, the newspaper reported, noting that the company's ability to straddle old and new technologies will affect its success.

The Free Press called GM's investment of $500 million for 9 percent of ride-sharing company Lyft, and $581 million for self-driving tech company Cruise Automation, "proactive moves, but they are not low risk."

Still, the company is well positioned going into the second half of the year, CNN Money reported, saying "even if U.S. sales start to fall at GM, it is far better positioned than it was last decade, when uncompetitive labor contracts and excess factories resulted in deep losses and a bankruptcy. GM can be profitable even if sales dip dramatically from the current record levels."

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General Motors reported record second-quarter earnings of $2.9 million on Thursday, well over twice the amount compared to the same time period a year ago.
gm, earnings, second quarter, q2, two billion dollars
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Friday, 22 Jul 2016 10:55 AM
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