GM Still Getting Killed Financially in Europe

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General Motors Co.’s (NYSE: GM) net of $1.4 billion in the third quarter would have been much better, if it did not post another of the years-long losses in its Europe operation. GM lost $387 million in what its calls its GME unit, up from $238 million in the same quarter last year. The suggestion that GM exit Europe becomes ever more financially attractive by the quarter.

GM did have a minor change in how it accounts for GME:

In the three months ended March 31, 2014 GM changed its managerial and financial reporting structure to reclassify the results of our Russian subsidiaries previously reported in our GMIO segment to our GME segment. Prior year segment results have been reclassified so all information is shown on a comparable basis. Consolidated results are unaffected by this change.

However, its unit sales in Europe show just how dire GM’s position is. It sold 284,000 cars in Europe in the third quarter, down from 344,000 in the same quarter a year ago. The Chevrolet division in Europe was slaughtered. Sales from the unit were 31,000, down from 95,000 in the same period a year ago.

Europe was barely mentioned in the GM earnings release. No wonder. Vehicle sales rose from 808,000 to 884,000 in North American third quarter, over the same period last year. In Asia, unit sales rose from 973,000 last year to 1,065,000 in the most recent period.

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All in all, the figures were unexpectedly good worldwide:

General Motors Co. announced third quarter net income attributable to common stockholders of $1.4 billion, or $0.81 per diluted share. A net loss from special items reduced net income by $0.3 billion, or $(0.16) per diluted share. Special items were primarily related to flood damage sustained at the GM Technical Center in Michigan and long-lived asset impairments in Russia.

“Strong global sales and growing margins in North America and China helped GM deliver very solid third quarter results,” said GM CEO Mary Barra. “Despite industry challenges in Russia and South America, our earnings were on plan as we continue to execute our customer-focused strategy.”

In the third quarter of 2013, GM’s net income attributable to common stockholders was $0.7 billion, or $0.45 per diluted share, which included a net loss from special items that reduced net income attributable to common stockholders by $0.9 billion, or $(0.51) per diluted share.

Earnings before interest and tax (EBIT) adjusted was $2.3 billion and included the impact of $0.2 billion in restructuring costs for actions taken in GM Europe. This compares to the third quarter of 2013, when the company recorded EBIT-adjusted of $2.6 billion, which included $0.1 billion in restructuring costs.

Net revenue in the third quarter of 2014 was $39.3 billion, compared to$39.0 billion in the third quarter of 2013. In the first nine months of 2014, revenue rose to $116.3 billion, up from $114.9 billion in the same period a year ago