General Motors net profit falls 40%

Changes to the company’s international business pushed automaker’s income down

DETROIT— General Motors’ secondquarter net profit fell more than 40 per cent as the company posted a loss from the sale of its European unit and charges for restructuring in India and selling its business in South Africa.

The company posted net income of $1.66 billion (U.S.), compared with a record $2.87 billion a year ago. But when the European loss and onetime items are stripped out, GM still made $2.4 billion from continuing operations, or $1.89 per share. That’s down12 per cent from last year, but it still beat Wall Street estimates easily. Analysts polled by FactSet expected $1.68 per share. Revenue was $37 billion, falling short of analyst estimates of $40.3 billion.

General Motors is gearing up for a tougher second half of the year as it slashes production to bring inventory back in line and prepares for new pickup and SUV models.

Both production and earnings will slip as GM temporarily closes North American factories being retooled to make fresher trucks and sport utility vehicles. Car plants, meanwhile, are cutting shifts as demand for sedans plunges. CEO Mary Barra has prepared GM for a downturn by improving the health of the company’s business beneath the surface, pivoting away from a reliance on bulk shipments of discounted sedans to rental-fleet companies. GM has struggled to entice investors who have been skeptical the company is going to be able to keep posting record earnings as it becomes more reliant on the North American market. With files from Bloomberg