DETROIT -- General Motors today posted higher second-quarter net profit in its two biggest markets -- North America and China -- and surprised analysts with a much narrower loss in Europe.
But weaker results in Southeast Asia and Australia, partly due to pricing pressure from the devalued Japanese yen, emerged as a problem spot during the April-June period, leading to a 19 percent drop in GM's net income, to $1.2 billion.
One-time items subtracted $200 million from GM's net income. Earnings before interest and taxes and excluding those nonrecurring items -- the figure that GM considers the best measure of its results -- rose 7 percent, to $2.3 billion.
CFO Dan Ammann told reporters at GM headquarters today that a slate of U.S. model introductions planned for the second half of the year should provide a "tailwind" for GM's North American unit, its biggest profit generator. GM North America's pretax profit edged higher by 5 percent, to $2.0 billion.
He said GM is "moving right into the rich part of our launch cycle for a lot of our new products," including the continuation of the pickup rollout and pending launches of the redesigned Chevrolet Corvette and Cadillac CTS sedan. "That sets us up very nicely for the second half of the year."
But GM's bottom line was hurt by higher costs associated with those launches, especially the pickup introduction, which began in late May. Those costs offset continued strong pricing in the United States, Ammann said.
Products driving results
The overall result marks GM's 14th straight quarterly profit since it emerged from its 2009 bankruptcy. It has piled up more than $19 billion in profits since then.
Revenue rose 4 percent to $39.07 billion.
On a conference call with analysts, CEO Dan Akerson said the influx of new and redesigned vehicles is driving its financial results. He spotlighted today's announcement by Consumer Reports that the 2014 Chevrolet Impala is the magazine's highest-rated sedan.
"Results like these are changing perceptions about our brands for the better," Akerson said. "You can see that trend reflected in our sales results."
GM's losses in Europe narrowed to $110 million from $394 million a year earlier. That puts GM on pace to hit its goal for 2013 of a "slightly" better result than the $1.8 billion loss on the troubled continent in 2012.
Through June, GM lost $285 million in Europe, compared with $688 million through the first half of 2012.
Ammann said GM hasn't changed its 2013 forecast for European results. He said the narrowed losses were due more to aggressive cost containment and better management of production capacity.
GM's bottom line in North America benefited from stronger pricing, even though its dealers were busy selling down stocks of the outgoing 2013 Silverado and Sierra full-sized pickups to make way for their 2014 successors. That typically translates into lower prices as bigger clearance incentives are offered.
But surging U.S. demand for pickups, spurred by the recovering economy and housing sector, has kept pricing buoyant. Average transaction prices on GM's full-sized pickups during the second quarter rose 5 percent from a year earlier, to $36,641, according to Edmunds.com.
"We've had a very successful time managing through the inventory transition from the old truck to the new truck," Ammann said.
Combined U.S. sales of the Silverado and Sierra rose 23 percent through June, to 330,219 units. The trucks are among GM's most profitable vehicles, generating around $10,000 in profit on average, analysts estimate.
Pretax profit at GM International Operations, which includes China, Southeast Asia, Australia, Russia and other markets, slid 64 percent, to $228 million.
While pretax profit in China rose, pricing pressure in several Southeast Asian markets and Australia hurt results overall, Ammann said.
He blamed "challenges with competitive pressure as a result of the [weaker] yen, particularly in Southeast Asia" and Australia. Ammann said price pressure is more intense in those markets than in North America -- where he said pricing remains "quite solid" -- because Japanese brands have much stronger market share and are able to price more aggressively.
"We don't see that abating in the immediate term," he said.
GM South America posted pretax profit of $54 million, up from $16 million a year earlier. GM Financial's pretax profit rose 17 percent, to $254 million.
GM shares surged 20 percent during the quarter, topping the $33 initial public offering price for the first time in more than two years.
They got a lift from GM's return to the Standard & Poor's 500 index last month and the U.S. Treasury's continued wind-down of its GM stake, which now stands at 189.2 million shares, or 14 percent of the company's outstanding shares.
GM's share price continued to rise this month, to $37.14 at Wednesday's close. In afternoon trading today, the stock slipped 39 cents, to $36.85.