US: GM posts Q3 net income down 15% to $1.7bn in "tough" global economy
GM CFO Dan Ammann
General Motors has posted third quarter net income down 15% from US$2bn to $1.7bn, although net revenue increased $2.6bn to $36.7bn compared with the third quarter of 2010.
Earnings before interest and tax (EBIT) adjusted was $2.2bn, compared with $2.3bn in the third quarter of 2010.
"GM delivered a solid quarter thanks to our leadership positions in North America and China, where we have grown both sales and market share this year," said GM chairman and CEO Dan Akerson.
"But solid isn't good enough, even in a tough global economy. Our overall results underscore the work we have to do to leverage our scale and further improve our margins everywhere we do business."
By geographical breakdown and allowing for EBIT adjustments, GM North America reported a figure of $2.2bn, an improvement of $0.1bn, GM Europe $0.3bn billion, an improvement of $0.3bn and GM international operation $0.4bn, down $0.1bn.
GM South America reported break even results on an EBIT-adjusted basis, down $0.2bn.
For the quarter, automotive cash flow from operating activities was $1.8bn and automotive free cash flow was $0.3bn.
Based on the current industry outlook, the company expects EBIT-adjusted results in the fourth quarter of 2011 will be similar to the fourth quarter of 2010 as a result of seasonal trends in North America and weakness in Europe.
GM also expects to record a special item in the fourth quarter to recognise a $800m non-cash settlement gain related to a Canadian Health Care Trust settlement.
Calendar-year EBIT-adjusted for 2011 is expected to show solid improvement over 2010. However, the company does not expect to achieve its target to break even on an EBIT-adjusted basis before restructuring charges in Europe, due to deteriorating economic conditions.
"GM continues to execute the plan we outlined for investors in 2010," said GM senior vice president and CFO Dan Ammann. "That includes investing in our products, further strengthening our balance sheet, generating cash and profits each quarter, and maintaining our low break-even level.
"The next level of performance will come as we systematically eliminate complexity and cost throughout the organisation."