General Motors reports 2nd-quarter earnings

By Kalea Hall | July 26, 2017 at 12:00a.m.

YOUNGSTOWN

General Motors reported a slight drop in earnings during the second quarter, but the Detroit automaker’s profits still exceeded expectations.

GM reported net revenue from continuing operations of $37 billion, down $0.4 billion from 2016’s second quarter. Income from operations was $2.4 billion, down $0.3 billion from the second quarter of 2016.

“I think GM had a very good quarter particularly in light of the fact that sales dipped a bit, but they still made a profit that was better than forecasted,” said Michelle Krebs, senior analyst for Autotrader.

Important to the nearly 3,000 General Motors Lords-town Assembly Complex employees is the net income for GM North America of $3.5 billion, down from $3.7 billion made during the second quarter of 2016.

For every billion GM makes in North America, hourly employees receive $1,000 in profit sharing, according to the United Auto Workers/GM agreement.

Last year, 52,000 hourly employees received up to $12,000 in profit sharing. The amount workers receive is dependent on how many hours they’ve worked.

So far this year, GM North America’s net income is $6.9 billion, up from $6.1 billion made at this point last year.

“The automaker is being very disciplined and profit focused and not focused on higher sales and market shares,” Krebs said. “They are willing to take action to maintain profits.”

Some of that action includes cutting back production to meet product demand. At GM Lordstown, assembly workers are back to building the Chevrolet Cruze this week after a multiple-week shutdown.

Lordstown’s third shift was cut in January to align with demand for the Cruze, a compact car.

Demand for cars has dropped as consumers continue to take more interest in crossovers and trucks.

GM sold 725,000 vehicles in the second quarter, down from 755,000 in the second quarter of 2016. Chevrolet crossover sales were 123,000, up from 107,000, and car sales dropped to 157,000 from 200,000 reported in the second quarter of 2016.

Krebs said all automakers are looking at their product portfolio and at how to adjust as the demand for cars continues to drop.

“They [cars] are still a huge market segment,” she said.