General Motors (NASDAQ:GM) posted their financial report for the third quarter of the current fiscal. Their profits have nearly doubled! General Motors (NASDAQ:GM) was struggling in South America and Europe but the strong market earnings in China and North America helped the company make it through the rough waters.
The company earned 81 cents a share to a net profit of $1.38 billion from July to September inclusive. Last year, the company made a profit of $698 million or 45 cents a share, in the same period. The company had faced a tough time this year due to the large number of recalls. The third quarter, however, shows lesser recall charges.
This year General Motors (NASDAQ:GM) had issued 75 recalls which covered over 30 million vehicles. This had cost the company about $2.8 billion. Analysts had expected the company to earn 95 cents per share. Had it not been for the special item charges of $331 million, General Motors (NASDAQ:GM) would have exceeded these forecasts by 2 cents a share. The company beat the revenue forecasts as well; while the analysts expected it to earn $38.79 billion, General Motors (NASDAQ:GM) earned $39.25 billion in revenue. After this announcement, the company’s shares increased by 2% in the premarket trade. The company set a new record for the best sales in the third quarter since 1980.
The earnings were bolstered by high demand of the new General Motors (NASDAQ:GM)’s pickup truck. Soon enough, the company will have made up for the millions spent on recalls. General Motors (NASDAQ:GM)’s CFO, Chuck Stevens told a news channel that considering the new earnings report, the massive equipment recalls will not have a significant effect on the company. He also said that the company has moved upwards and onwards, leaving behind the defective air bag issue.
On Wednesday, General Motors (NASDAQ:GM) posted warnings for some of the owners of Saab 9-2X and Pontiac Vibe to prevent driving with someone in the passenger seat at the front. These cars were fitted with Takata air bags. National Highway Traffic Safety Administration has also warned car owners of other brands to get Takata air bags replaced. According to Stevens, this issue will have no significant impact on the economy of the company for now. He reported that General Motors (NASDAQ:GM) has attained 9.5% margins. The company has achieved year-over-year margin growth in the fifth quarter in a row.
General Motors (NASDAQ:GM) had to pay a fine worth $35 million because the company gave a slow response to the recalls for faulty ignition switch. Because of the criticism over this issue, the company’s chief lawyer, Micheal Millikin, announced that he will retire early in the next year.
The CFO, Stevens, said that the company has begun its venture to achieve margins of 10% in the North America, before taxes and amortizations, interests and profitability in Europe. The company is also set out to attain 9-10% margins in China, which is a higher revenue base.