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The Boston Globe

Business

GM profit falls 69%, despite gains in US

DETROIT - General Motors said Thursday that its profit increased 30 percent in North America in the first quarter, but a loss in Europe and a one-time charge contributed to a 69 percent decline in total earnings.

GM posted $1 billion in net income attributable to common stockholders in the quarter, down from $3.2 billion a year earlier, when it benefited from several large isolated gains. Revenue in this year’s quarter rose 4 percent to $37.8 billion.

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Despite the overall earnings decline, GM surpassed analyst estimates that averaged 85 cents a share, excluding taxes, interest, the charge, and other special items. On that basis, GM earned $2.2 billion, or 93 cents per fully diluted share, up from $2.0 billion, or 95 cents a share, a year ago.

“The US economic recovery, record demand for GM vehicles in China, and the global growth of the Chevrolet brand helped deliver solid earnings for General Motors,’’ said chief executive Daniel F. Akerson.

“New products are starting to make a difference in South America, but Europe remains a work in progress,’’ he said. “We’ll continue to work on both revenue and cost opportunities until we have brought GM to competitive levels of profitability.’’

In its key North American market, GM posted $1.7 billion in earnings before interest and taxes, up from $1.3 billion. Even though its market share dropped to 17.5 percent in the United States, the lowest since 1922, GM increased its margins as customers paid higher prices for vehicles.

It lost $256 million in Europe, after breaking even in that region a year ago. The loss was an improvement, however, from the $562 million it lost there in the fourth quarter, though GM’s chief financial officer, Daniel Ammann, said it is “too hard to say’’ whether the worst for Europe has passed.

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“It’s really a function of the overall economic environment there,’’ Ammann told reporters at GM’s headquarters.

After a brief trip through US Bankruptcy Court protection in 2009 and losing $88 billion in the four years prior to that, GM has been profitable for nine consecutive quarters. It earned $7.6 billion in 2011, the first full year after its public stock offering.

Ammann said the one-time goodwill impairment charge of $590 million was related to pension accounting in Europe and was not a negative indication of future profit potential.

Earnings in South America were equal to a year ago, and slightly lower in the region that includes Asia.

GM, which is 26 percent owned by the US Treasury Department, posted $2.3 billion in automotive cash flow and ended the quarter with $37.3 billion in total automotive liquidity.

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