GM Profits Soar, and Volkswagen is the Anti-GM

Steph Willems
by Steph Willems

There’s happy faces inside the Renaissance Center today.

General Motors saw its first-quarter pretax profit rise 28 percent, despite continuing trouble in foreign markets, Automotive News has reported.

A net income of $1.95 billion means investors will reap $32.66 a share, a 1.5 percent increase. Revenue was up four percent in the first quarter, at $37.27 billion.

Though global sales were down, GM managed to cut its losses in problem markets, especially South America, where the automaker posted a $67 million loss (down from $214 million the year before). In Europe, GM trimmed its $239 million Q1 2015 loss to just $6 million, the result of a product push by Opel. Chinese sales were flat.

The automaker pulled out of Russia last year amid that country’s protracted recession, and those costs are still being felt on the balance sheet. Despite a smaller footprint in the fleet market, GM sales rose 1.2 percent in North America, with profits up five percent over this time last year.

While problems and pressures continue for GM, it — and other automakers — can take comfort in the fact that it isn’t Volkswagen.

The embattled German automaker’s financial information has been delayed ever since the diesel emissions scandal broke last September, but the Wall Street Journal reports that the company saw a net loss of 1.58 billion euros ($1.77 billion) in 2015.

Volkswagen’s operating loss in 2015 was 4.1 billion euros ($4.6 billion). Compare that to the net profit of 10.85 billion euros ($12.19 billion) it recorded a year earlier.

Earlier today, Volkswagen announced it will set aside $18.2 billion to deal with the fallout of the emissions scandal.

Steph Willems
Steph Willems

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  • Vetteman Vetteman on Apr 23, 2016

    GM is showing a profit in large part because of where we are in the auto cycle . Full size Pickup sales are very strong and the pricing and large profits they generate are reflecting this . I totally agree with Heavy Handle that the company is totally dependent on the truck portions of their business for any profitability . It has been this way for 30 years . Their cars of the 80's and 90's drove off legions of loyal GM customers to Honda, Toyota etc. All my friends and family who had GM cars in the past would not even consider buying one today . A truck yes would be considered but not like in the past when they would only look at GM now they shop for the best product no matter what the brand is . If you are shopping for a new full size truck like I have recently what strikes me is the high price of GM trucks in relation to other brands for what you actually get . As to GM being a healthy company just look at its market share here in the states Thru March GM is up 0.9 percent versus the whole market increase of 3.2 percent Look at their year over year market share . Its been going down for over thirty years I remember their big push to hold 29 percent back in the late nineties Year to date thru march 15.8 percent They are profitable now because of an extremely strong 17 million plus annual sales year that is probably at a cyclical peak right now combined with a normal mid to late recovery high demand for light trucks . Any weakness going forward in the economy will throw this company in the red very quickly . I am surprised with as good as this market is and how much they have raised their vehicle prices that they are not booking muck larger profits like they have in past boom periods for the auto business http://online.wsj.com/mdc/public/page/2_3022-autosales.html

  • Eyeflyistheeye Eyeflyistheeye on Apr 23, 2016

    Speaking of GM and Ford, I still don't like how GM has too many competitors in each segment and nothing is rationalized. Why does GM need a crapbox B-segment car in the Spark/Karl and an overstyled but cramped one in the Adam that's not even sold outside of Europe? Or a Sonic and a Corsa? Why does GM need a Cruze and an Astra in the C-segment when Ford makes do with the Focus? Why does GM need a Malibu, Regal/Insignia, LaCrosse and Impala? While they're all Epsilon 2 cars, do we need all four? Aside from the fact that GM's creative accounting has already discussed in depth earlier, I still would have a queasy feeling about investing in GM if they can't get their lineup together.

  • Jeff S Jeff S on Apr 23, 2016

    GM, Ford, and Fiat Chrysler are all too dependent on trucks. If truck sales took a large plunge they all would be in trouble. Fiat Chrysler is the most dependent on trucks and suvs. Even Ford would be in financial trouble without truck sales.

  • Laserwizard Laserwizard on Apr 25, 2016

    What is even sweeter is that Total Recall Motors was allowed by the Obama Administration to steal $14 billion in GM losses to be used to offset profits in the new company - which means the company will not be paying much if any taxes on the profits it makes - just like it never paid a dime in interest or taxes on the use of $49.5 billion that they had and the unrecovered $10 billion plus taxpayer funded interest carrying costs on the bailout that will only grow since everything was financed by deficit spending.

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