GM Profit Drops 19%

General Motors Co. netted $1.2 billion in the second quarter of this year compared with $1.5 billion a year earlier.

Quarterly revenue and vehicle sales both rose 4% to $39.1 billion and 2.49 million units, respectively. The company's global market share slipped 0.1 point to 11.5%.

GM earnings before interest and taxes and excluding one-time items climbed 7% to $2.3 billion in the April-June period. Solid results in China and North America and improvements in Europe were offset by declines in southeast Asia and Australia.

CEO Dan Akerson says the company must accelerate cost-cutting efforts to close its profitability gap with rival Ford Motor Co. GM posted an 8.4% operating income margin in North America in the latest quarter compared with Ford's 10.4% margin in the region.

GM's auto operations generated $2.6 billion of free cash flow in the three-month period compared with $1.7 billion a year earlier. The company had $24.2 billion in cash on June 30.

GM results by business unit in the second quarter include:

NORTH AMERICA: Operating profit in the region increased 5% year over year to $2 billion. Revenue grew 9% to $23.5 billion. Vehicle sales climbed 7% to 880,000 units even as the company shrank fleet sales by 2.6 points to 27%.

CFO Dan Ammann says the cost of launching new vehicles, including its new fullsize pickup truck, offset much of the benefit of improved vehicle pricing in the region. He predicts that strong sales of the new models will boost GM's North American sales and earnings in the second half.

EUROPE: The unit narrowed its operating loss to $110 million from $394 million a year earlier. Revenue and vehicle deliveries both slid 7% to $5.2 billion and 425,000 units, respectively.

GM's European results may soften in the second half, Ammann warns. But he says the unit is still expected to reduce its full-year loss from the $1.8 billion deficit it recorded in 2012.

SOUTH AMERICA: Operating earnings in the region more than tripled to $54 million in the second quarter. Revenue rose 5% to $4.3 billion. Sales increased 3% to 262,000 vehicles.

INTERNATIONAL: The company's operating income in Asia Pacific, Africa and the Middle East plunged 64% to $228 million. Revenue dropped 11% to $5.3 billion despite a 7% gain in sales to 925,000 vehicles. GM says the weakening yen is allowing its Japanese competitors to slash prices in such markets as India and Australia.

GM FINANCIAL: The lending arm hiked operating earnings 17% to $254 million.