GM profits drop on EU loss

Published:  7 May at 6 PM

As reported by the BBC, due to slowing European operations, American car giant General Motors has seen a sharp decline in quarterly profits. The company’s net profit in the first three months of 2012 was $1.35 billion (£830 million), dropping from $3.41 billion one year earlier.

In Europe, GM saw a loss of $300 million during the period, although it broke even one year ago. It also saw its goodwill adjustments decrease in profits by $600 million.

However, record business demand in China aided in pushing overall revenues up by 4 percent at $37.8bn. GM shares dropped by nearly 2 percent during New York’s early trading after the results were published.

CEO Dan Akerson says record demand for GM vehicles in China, the growth of the Chevrolet brand around the globe, as well as the US economic recovery helped deliver positive earnings for the company.

New products are especially beginning to make a difference in the South American market, but Europe is still a work in progress, he added.

The car manufacturer raised its sales predictions for this year, forecasting sales of 14 - 14.5 million cars compared to its previous forecast of 13.5 - 14 million.