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GM Net Income Down – But Earnings Up Before Taxes

Maker increases projected losses in Europe.

by on Oct.31, 2012

GM continues to struggle in Europe, even as the home market rebounds.

General Motors reports it earned $1.5 billion during the third quarter of 2012, a 14.5% decline in net profits, though the maker’s earnings before interest and taxes, or EBIT, rose nearly 5%.

The maker’s latest quarter reflected a generally strong performance in a U.S. market that has seen a sharp upturn in car sales this year that has defied skeptics’ forecasts. And the maker did well in Asia and most other international operations. But GM was hammered by the collapse of the European automotive market and the ongoing problems at its German-based Opel subsidiary.

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“GM had a solid quarter because customers around the world love our new vehicles and we’re also seeing green shoots take hold on tough issues like complexity reduction, pensions and Europe,” said Chairman and CEO Dan Akerson. “We are going to keep playing offense with growth products like the Chevrolet Onix, Opel Mokka and Cadillac ATS and continue to systematically address business risks.”

Despite the decline in net earnings, which worked out to 93 cents a share, the maker significantly beat Wall Street expectations.  Industry analysts had collectively anticipated the maker would come in at around 60 cents a share. A year ago, net income was $1.7 billion, or $1.03 a share.