GM Profits Jump as Revenue Dips

General Motors Co.'s net revenue dropped 4% to $38.2 billion in the second quarter of 2014, hurt by unfavorable exchange rates that cut automotive revenue by $2.2 billion.

Net income in April-June jumped to $1.1 billion from $278 million in the same period of 2014. Results were powered by lower recall costs, strong demand for high-margin trucks in the U.S. and a more favorable sales mix in China.

Second-quarter operating income swung to $1.3 billion from a $500 million loss in 2014. Adjusted earnings before interest and taxes zoomed to $2.9 billion from $1.4 billion.

GM's worldwide vehicle deliveries in April-June fell 3% to 2.4 million units. Erosion in China (-1%) and South America (-27%) offset gains in North America (+4%) and Europe (+3%). The overall decline caused the company's global market share to decline by 0.2 percentage points to 11.1%.

The cost of special items grew to $1.6 billion from $1.1 billion in the second quarter of 2014. GM notes that a sharp drop in recall expenses was more than offset by costs associated with exiting the Russian market and restructuring operations in Thailand.

Quarterly EBIT in North America doubled to $2.8 billion, and losses in Europe narrowed to $45 million. EBIT losses in South America climbed 78% to $144 million, but GM's results elsewhere in the world rose 11% to $349 million.

Sales in first half of 2015 dropped 4% to $73.9 billion as volume stalled at 4.8 million vehicles. But net income surged sevenfold to $2.1 billion. GM says cost-cutting saved $1.1 billion in January-June.