(Photo: General Motors)
DETROIT General Motors net income fell 14 per cent in the first quarter, as it earned less money in North America while preparing to launch a redesigned version of its bestselling vehicle, the Silverado pickup.
GM earned $865 million, or 58 cents per share, down from $1 billion, or 60 cents per share, in the January-March period a year ago. But excluding one-time items, GMs earnings of 67 cents per share topped analysts forecast for 54 cents, according to FactSet.
Revenue also topped Wall Streets expectations, and the company lost less money in Europe than a year ago. Shares rose 3 per cent to $31.10 in premarket trading.
RELATED: Fords fourth quarter profit of $1.6 billion tops estimates
Worldwide sales rose 3.6 per cent to more than 2.3 million. GM had record sales in China, and it boosted its share of the North American market as sales in the U.S. rose 9 per cent.
GMs earnings in North America fell 12.5 per cent from a year ago to $1.4 billion. Chief Financial Officer Dan Ammann said the dro was due to reduced shipments of pickup trucks ahead of the launch of GMs newly redesigned Chevrolet Silverado and GMC Sierra full-size pickups. Those go on sale in a few weeks. Auto companies book profits on a vehicle when it leaves the factory.
GM sold a record 816,373 vehicles in China, up 10 per cent from the first quarter a year ago. Among the hot sellers was the Cadillac XTS full-size sedan, which went on sale in China in February. Chinese buyers snapped up more than 2,000 XTS sedans in March alone, despite their steep starting price of $56,000.
Profits in GMs international operations, which includes China, fell 5 per cent to $495 million. Ammann said gains in China were offset by weakness in other regions, including India.
The XTS and smaller ATS also gave GM a boost in the U.S., wher GM sold 664,964 cars and trucks in the quarter and outpaced the industrys gain of 6 per cent. U.S. Cadillac sales jumped 38 per cent while Buick sales were up 27.5 per cent thanks to the new Verano small car and Encore small utility.
Sales of the Silverado rose 22 per cent in the U.S., boosted by an increase in home building and other construction.
In Europe, wher the government debt crisis and high unemployment have led to 18 straight months of declining industry sales, GMs loss narrowed to $175 million from $294 million a year ago. Ammann said GM is not yet ready to say that the European auto industry has hit bottom, but the company is proceeding with its plan to invest in new products and close a German plant by 2014.
There are things we can control and were making good progress on those, he said.
GMs revenue fell 2.3 per cent to $36.9 billion in the first quarter. One-time items included a charge for currency devaluation in Venezuela.
GM is the last of the Detroit Three to report first-quarter earnings. Ford Motor Co. said last month its first-quarter profit rose 15 per cent to $1.6 billion for the quarter while Chrysler Groups earnings fell 65 per cent to $166 billion. Chryslers earnings also were impacted by reduced vehicle shipments as it prepares to launch the new Jeep Cherokee.
