General Motors has reported strong earnings growth for the second quarter and cited record margins in North America as a key driver.

Second quarter net income was US$1.1bn, or US$0.67 per diluted share, which included a US$1.1bn loss from special items before tax, or US$(0.62) per diluted share. Net income in Q2 last year was US$0.2bn.

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Earnings before interest and taxes (EBIT) adjusted increased to US$2.9bn and EBIT-adjusted margin grew to 7.5%.

“The first two quarters of the year were strong as we fully capitalised on a robust North American industry and maintained our strength in China, despite the challenging conditions in that market,” said GM CEO Mary Barra.

“We said our goal was to improve our earnings and margins this year, and we are on-plan. Consistent with that, we believe our results in the second half of the year will be even better than the first half, and we’re confident we will meet our 2016 targets.”  

The year-earlier quarter included US$1.5bn in expenses for safety recalls.

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GM’s US$2.8bn pretax profit in North America was a second-quarter record, boosted by strong sales of GM trucks and SUVs.

Net revenue in the second quarter of 2015 was US$38.2bn, compared to US$39.6bn in the second quarter of 2014. GM said the change in revenue is “more than attributed to a negative net foreign currency exchange impact”. Holding exchange rates constant, net revenue was US$0.9bn higher than the second quarter of 2014.

“Our plan is generating results and giving us momentum,” said Chuck Stevens, executive vice president and chief financial officer. “Record margins in North America and strong margins in China produced a second quarter that demonstrates the earnings power of this company. We expect continued strong performance in these key markets.” 

GM narrowed its loss in Europe in the second quarter, breaking even versus a US$300m loss in Q2 of last year, despite difficulties in Russia.