Despite a quarterly operating loss by its European unit, General Motors Co. on Thursday reported a $1.3 billion net profit for the April-June period -- its largest quarterly profit since 2004. The results surpassed the $865 million in net income the U.S. automaker reported in the first quarter.
The automaker's European operations continued to drag down GM's overall results with a $160 million loss. The unit lost $506 million in the first quarter.
Profits before interest and taxes at the company's international operations declined 42 percent to $672 million.
“I am pleased with our progress on achieving our business objectives,” Chris Liddell, GM's chief financial officer, said in a statement.
GM, which is poised to launch one of the largest public stock offering in U.S. history this year, reported a $12.9 billion net loss during the second quarter last year.
Second-quarter revenue was $33.2 billion, up 44 percent from $23.0 billion in the second quarter of 2009. First quarter revenues were $31.5 billion.
Earnings before interest and taxes -- a key measure used to determine the company's value -- came in at $2.0 billion during the quarter, up 11 percent from $1.8 in the first quarter.
In North America, GM said it earned $1.6 billion before interest and taxes, up 33 percent from $1.2 billion during the first quarter.
GM said its cash flow from operations was $3.9 billion. The company said it ended the second quarter with $32.5 billion in cash.
GM's revenue and profit gains in the second quarter were driven by an increase in output and higher productivity in its plants.
“Last year GM was shutting down plants when they filed” Chapter 11, Mike Wall, an industry analyst with IHS Automotive, said before the release. “This summer, most of its U.S. plants were running full out.”
Models such as the Chevrolet Equinox, GMC Terrain and Cadillac SRX are selling well and with higher profit margins because GM lowered its costs in bankruptcy, Wall said.
Growth in China
Through the first half of the year, GM's China sales, including those of its joint ventures, rose 49 percent to 1.2 million vehicles compared with last year, according to the automaker. That exceeded the 1.1 million cars and trucks GM sold in the U.S. in the year's first half.
Chevrolet brand sales more than doubled in the first half in China, driven by strong sales of the Cruze small car. Buick sales rose 29 percent, according to J.D. Power & Associates. GM is the No. 2 seller in China, behind Germany's Volkswagen AG, according to J.D. Power.
“GM went through a rough time last year, but they never backed away from China,” said Tim Dunne, an analyst with J.D. Power. “China provides the bulk of their revenue and profits from Asia.”
During the second quarter, GM finished repaying $8.4 billion in U.S. and Canadian loans assumed as it emerged from bankruptcy.