US Demand Gives General Motors a Boost

General Motors has posted third-quarter profits of $1.4 billion on $38.8 billion in revenue.

GM shares closed up $1.94, or 5.8 percent, to $35.42 in trading Wednesday on the New York Stock Exchange.

In the quarter, GM took a charge of $1.5 billion related to its ignition switch recall, with $900 million doing to a settlement with the U.S. Department of Justice and the rest to settle lawsuits related to death and injury cases. GM’s adjusted earnings per share is at $1.50 while analysts estimated it to be only $1.9 average.

DETROIT – General Motors reported third-quarter profit that beat analysts’ estimates as strong light-truck sales in the United States and stable operations in China produced a record $3.1bn in adjusted earnings before interest and taxes (ebit).

Chuck Stevens the CFO at GM said the automaker is expecting to reach its goal in 2015 of generating profits margins of 10% in North America for the year, which is one year ahead of its current forecast.

Based on the same formula, which likely will be part of the upcoming contract talks, the profit-sharing payment would be based on the $8.3 billion number, plus whatever North American profit GM makes in the fourth quarter.

GM’s robust quarter contrasted with disappointing results from other big US manufacturers, which have wrestled with slowing growth in China and the drag on revenues exerted by the strong USA dollar. China saw a drop in joint-venture profit for the period but its profit margins soared to 9.8 percent.

“These results reflect on our work to capitalize on our strengths in the USA and China”, Chief Executive Officer Mary Barra said in a statement.

In Europe, GM’s loss narrowed to $231 million, and Stevens said GM is on track to be profitable there next year. The results topped Wall Street expectations.

Overall sales of cars in the U.S.in September were the strongest for a decade.

In short, that fourth-quarter profit would need to be $700 million to generate the same payment as past year.

GM said in September that ignition-switch scandal cost it more than $5.3 billion.

Boeing said it earned $2.47 per share.

“China has not fallen off the cliff as everyone had expected”, Stevens said. Those sales more than offset GM’s weakness in emerging markets and South America. He reiterated that GM will turn a profit in Europe next year.

American Express Co. reported a third-quarter profit of $1.23 billion.