GM Earnings Drop 14% As European Losses Deepen

General Motors Co.'s net income fell to $1.8 billion (€1.4 billion) in the third quarter from $2.1 billion (€1.6 billion) in the same period a year earlier.

Revenue rose 2% to $37.6 billion (€29 billion), and global sales improved almost 2% to nearly 2.3 million units. Stronger profits in Asia and South America helped offset shrinking profits in North America and worsening losses in Europe.

GM's third-quarter operating loss in Europe widened to $478 million (€368 million) from $292 million (€225 million) a year earlier. Revenue fell 18% to $5.1 billion (€3.9 billion), and sales dropped 7% to 382,000 vehicles.

GM Europe has shed 2,300 jobs this year through attrition and expects to reach its target of 2,600 jobs by year-end. The unit, which lost $1.1 billion (€848 million) from January through September, predicts a full-year deficit of $1.5 billion-$1.8 billion (€1.2 billion-€1.4 billion).

GM anticipates "slightly" better results in Europe next year but does not expect those operations to break even until about 2015.

In North America, earnings fell $400 million (€308 million) to $1.8 billion (€1.4 billion) in the third quarter because of higher warranty costs, GM says. Revenue in the region grew 7% to $23.3 billion (€18 billion). Sales edged up less than 2% to 759,000 units.

International Operations which include Asia Pacific, Russia and the Middle East boosted operating profit 89% to $689 million (€531 million) in the July-September period. Pricing pressure hurt income in China, so other foreign markets contributed most of the gains, according to the company. The unit's revenue grew 10% to $6.7 billion (€5.2 billion), and its sales rose nearly 6% to 857,000 vehicles.

GM's South American operations swung to a $114 million (€88 million) quarterly profit, reversing a $44 million (€34 million) loss in July-September 2011. Revenue declined nearly 2% to $4.3 billion (€3.3 billion) in the latest quarter despite a 2% sales gain to 283,000 vehicles.