Europe whittles down GM's strong second-quarter profit

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Joseph C. Cassini drives his 1934 Packard 1108 Twelve Dietrich Convertible Victoria onto the winners platform after being awarded the Best of Show award at the Pebble Beach Concours d’Elegance. (Bob Chamberlin / Los Angeles Times)

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Ben Rehm, 20, of Carmel photographs a 1927 Rolls-Royce Phantom I Murphy Convertible Saloon at the Concours d’Elegance on Sunday. (Bob Chamberlin / Los Angeles Times)

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Mitzy from Salinas takes a moment to rest in the shade of a 1955 Lincoln Indianapolis Boano coupe. (Bob Chamberlin / Los Angeles Times)

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A Duesenberg with a tool kit mounted inside the driver’s door is displayed at the Concours d’Elegance. (Bob Chamberlin / Los Angeles Times)

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Photographer Phillippe Carre takes a picture of a vintage Alfa Romeo. (Bob Chamberlin / Los Angeles Times)

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Julia Binke, 6, walks in front of a 1925 Rolls-Royce Silver Ghost at the Concours d’Elegance on Sunday. (Bob Chamberlin / Los Angeles Times)

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Sporting racing-flag toenail polish, Lori TenEyck of Colorado was one of nearly 10,000 people enjoying the display of about 200 collector cars at the Concours d’Elegance. (Bob Chamberlin / Los Angeles Times)

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One of the nearly 200 collector cars greets the dawn as it rolls onto the 18th fairway at Pebble Beach. (Bob Chamberlin / Los Angeles Times)

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Chewing on his cigar, Rick Rawlins drives a 1908 Prince Henry Benz, owned by Ann Bothwell but originally owned by race car driver Barney Oldfield, as nearly 200 collector cars greet the dawn as they roll onto the 18th fairway at Pebble Beach to begin the Pebble Beach Concours d’Elegance. (Bob Chamberlin / Los Angeles Times)

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Spectators line up to see the nearly 200 collector cars at the Pebble Beach Concours d’Elegance. (Bob Chamberlin / Los Angeles Times)

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A rumble-seat passenger in a 1933 V-12 Packard at the Pebble Beach Concours d’Elegance. (Bob Chamberlin / Los Angeles Times)

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Wearing a variety of hats, contestants ride in their Rolls Royce. (Bob Chamberlin / Los Angeles Times)

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Adele Tanaka, left, and Jo Yuan capture the moment as the first of nearly 200 collector cars greets the day to begin the Pebble Beach Concours d’Elegance. (Bob Chamberlin / Los Angeles Times)

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A 1957 Ferrari 250 GT 14-Louver Berlinetta is on display at the Gooding & Co. auction as part of the Concours d’Elegance weekend at Pebble Beach. (Bob Chamberlin / Los Angeles Times)

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A prospective buyer looks down a line of cars up for auction at the Concours d’Elegance weekend at Pebble Beach. (Bob Chamberlin / Los Angeles Times)

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A Shelby 289 Cobra Competition Roadster from 1964 is reflected in the fender skirt of a 1937 Bugatti Type 57SC Atalante at the Concours d’Elegance weekend at Pebble Beach. (Bob Chamberlin / Los Angeles Times)

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At the Concours d’Elegance weekend at Pebble Beach, a 1925 Bugatti Type 35 Grand Prix is on display. (Bob Chamberlin / Los Angeles Times)

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A 1935 Avions Voisin C25 Aerodyne, featuring an early version of a sun roof, is on display at the Concours d’Elegance weekend at Pebble Beach. (Bob Chamberlin / Los Angeles Times)

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Sports Car magazine photographer Dave Tomaro photographs prospective buyers as they spend the afternoon ogling vintage and rare automobiles on display at the Concours d’Elegance weekend at Pebble Beach. (Bob Chamberlin / Los Angeles Times)

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A Bentley radiator ornament at the Gooding & Company auction tent at the Concours d’Elegance weekend at Pebble Beach. (Bob Chamberlin / Los Angeles Times)

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A man uses a camera to get a closer look at the undercarriage of a 1956 Porsche 356 A 1500 GS Carrera Coupe. (Bob Chamberlin / Los Angeles Times)

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Expensive cars are lined up at the Concours d’Elegance weekend at Pebble Beach. (Bob Chamberlin / Los Angeles Times)

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A racing rim signed by Carroll Shelby, the father of the Cobra, in Lynn Park’s garage. (Bob Chamberlin / Los Angeles Times)

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“If one’s good, two’s got to be better,” Park said of the cars, chuckling. (Bob Chamberlin / Los Angeles Times)

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Park stands beside the second Cobra he ever bought. One of his sons is going to race in it. (Bob Chamberlin / Los Angeles Times)

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Park checks the hoses of a Cobra he will take to Pebble Beach. This particular car is worth about $2 million. (Bob Chamberlin / Los Angeles Times)

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Park opens the garage door in front of one of the Cobras he plans to take to Pebble Beach. (Bob Chamberlin / Los Angeles Times)

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Lynn Park with his garage full of Cobra cars. Known in classic car circles as Mr. Cobra, Park has been collecting the marque since he bought his first after getting out of the Army in 1969. The first purchase got him hooked. (Bob Chamberlin / Los Angeles Times)

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Lynn Park keeps his Cobras in his garage in La Cañada Flintridge. He and his sons plan to race race three of them at the Pebble Beach, Calif., event. (Bob Chamberlin / Los Angeles Times)

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“You can’t have any more fun than playing with old cars,” Park said of vintage racing. (Brian van der Brug / Los Angeles Times)

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Lynn Park drives one of his vintage Shelby Cobras around his neighborhood in La Cañada Flintridge. (Brian van der Brug / Los Angeles Times)

By Jerry Hirsch

July 25, 2013 8:09 AM PT

Profits at General Motors Co. fell by 19% during the second quarter as losses in Europe continued to offset strong sales in North America.

GM posted a proft of $1.2 billion, down from $1.5 billion in the same period a year earlier. Revenue rose 4% to $39.1 billion compared to the same period a year earlier.

“We continue to perform well in the world’s two most important markets, the U.S. and China,” Dan Akerson, GM’s chief executive, said Thursday. “We also made further progress in our European business and saw the steady performance of our global brands Chevrolet and Cadillac.”

In part because the losses in Europe were less than expected, GM’s profit beat Wall Street’s expectations, said Brian Johnson, an analyst at Barclays Research.

GM’s profit equalled 84 cents a share compared to Johnson’s estimate of 77 cents and the Wall Street analyst consensus of 76 cents.

GM and its domestic rivals are benefiting from a robust U.S. auto market that has seen sales of pickup trucks – among the most profitable vehicles in the industry – soar as the housing and construction industries rebound from the recession.

“Things couldn’t be better thanks to the nascent U.S. housing recovery,” Akerson said.

The automaker’s North American operating profit rose more than 4% to nearly $2 billion in the second quarter.

Chief Financial Officer Dan Ammann said GM’s U.S. business during the second half of this year should be strong as it rolls out redesigned models of several signature vehicles, including its Chevrolet Silverado pickup truck, Cadillac CTS sedan and Chevrolet Corvette sports car.

Although GM continues to lose money in recessionary Europe, its losses slowed in the latest quarter to $110 million from $394 million in the same period a year earlier. But Akerson cautioned that a turnaround in the region “isn’t in sight yet.”

Profits slid $228 million from $627 million in GM’s international division, which is made up mostly of business in China and Asia.

Although GM’s China business remains healthy, softness in Indian and Russian auto markets hurt the results, as well as tougher competition from Asian competitors in Australia, Amman said. GM was also hurt by warranty and recall issues in its international divisions.

“We will continue to have impact from all of those things heading into the third quarter,” Ammann said.

But there was improvement in South America, where GM posed an operating profit of $54 million compared to $16 million a year earlier.

On Wednesday, Ford Motor Co. said its second-quarter profit rose 18.5% to a $1.2 billion. Revenue rose 14.4% to $38.1 billion. Ford’s gains were powered by brisk sales of profitable pickup trucks, growing business in China and fewer losses in Europe.

GM’s shares fell 19 cents to $36.95 in early trading.

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