Editor’s note: An earlier version of this story overstated GM’s adjusted earnings per share in the second quarter.
DETROIT — General Motors said second-quarter net income rose 1.6 percent to $2.4 billion, as the next-generation Chevrolet Silverado pickup powered North American profit growth, and it expects better results in the back half of the year.
The biggest U.S. automaker's adjusted earnings before interest and taxes fell 5.6 percent to $3 billion from the same period a year ago. Its margin slipped 0.3 percentage point to 8.4 percent. Revenue fell 1.9 percent to $36.1 billion.
GM's second-quarter performance was driven by the all-important North America market, where it earned $3 billion, up from $2.7 billion the same period a year ago. That produced a 10.7 percent profit margin, thanks to sales of its new pickups and crossovers and the results of restructuring. Heavy-duty versions of the Silverado and GMC Sierra launched in June, the company said in a statement.
GM shares traded higher for most of the day but closed down 0.5 percent to $40.15 after the Trump administration decided to impose additional tariffs on China, causing the market to decline rapidly just before the end of trading.
“You’re really starting to see the earnings potential of our truck franchise,” CFO Dhivya Suryadevara told reporters Thursday morning at GM’s headquarters.
She said the automaker was very happy with its pickup position, despite falling into third place behind Fiat Chrysler’s Ram.
“We had a deliberate strategy that our launch would be cadenced,” she said. “It was a strategy that was rolled out on purpose, and it’s working.”
Suryadevara noted GM began by rolling out higher-margin crew cab versions of the Silverado, where share increased 3 percent quarter-over-quarter. It will be helped in the second half of the year by the continued rollout of HD models as well as diesel variants.
“It’s early innings,” she said.
The UAW took note of the report amid negotiations over a new U.S. labor contract. The current UAW-GM contract expires Sept. 14.
“UAW members are proud of the profitable company they have built," UAW Vice President Terry Dittes said in a statement. "We worked with GM in its darkest hour and now it is time for GM to work with us on our wages, benefits, safety and contribution to these sustained profits."
The company realized savings of $1.1 billion thanks to restructuring actions in the first half of the year, including $700 million in the second quarter, Suryadevara said. That includes salaried layoffs and “unallocation” of manufacturing plants. She added the automaker was not likely to announce any new cost-saving actions.
GM said 1,700 of the 2,800 hourly workers affected by the unallocations have been placed in new jobs and that positions are available for all affected employees at other facilities.
GM's adjusted earnings per share of $1.64, a key metric for financial analysts, far exceeded Wall Street estimates averaging $1.44.
The automaker reiterated full-year guidance of between $6.50 and $7 earnings per share and between $4.5 billion and $6 billion adjusted automotive free cash flow. Through six months, the company has earned $3.04 per share.
Suryadevara said cash flow for the remainder of the year will be evenly distributed between the third and fourth quarters.
GM nearly broke even on its international business, with a loss of $48 million in the quarter, down from a profit of $143 million a year earlier. China income fell by more than half to $235 million. Its other international markets improved by about $200 million, thanks in part to restructuring actions in Korea and South America, she said.
“Anytime you’re working on something that’s never been done before, brand-new technology, a timeline is likely to move around a little bit,” CEO Mary Barra said on an earnings call. “We have line of sight on what we need to accomplish both from the technology development …and we’re working hard to make sure we have the right regulatory environment as well.”
GM Financial reported $536 million in income before income taxes in the quarter on record revenue of $3.6 billion, which Suryadevara attributed to portfolio growth. GM Financial reported net income of $403 million, down 8.8 percent.
