DETROIT—General Motors’ third-quarter profit fell slightly, but the company rode strong North American sales to overcome $1.5 billion in costs from its deadly ignition switch recall. Its shares rose almost 7 percent in afternoon trading Wednesday.
The Detroit automaker’s net income slipped 1.4 percent from a year ago, but still was $1.36 billion, or 84 cents per share. That compares with $1.38 billion, or 81 cents per share, a year ago.
Without the recall costs, GM would have made a $1.50 per share, soundly beating Wall Street expectations. Analysts polled by FactSet expected $1.18 per share.
The company posted a record $3.3 billion pretax profit in North America largely on high-profit truck and SUV sales, more than offsetting a small decline in China and a loss in South America.
The news pushed GM shares up $2.29, or 6.8 percent, to $35.77 in afternoon trading Wednesday.
Chief Financial Officer Chuck Stevens said the GM’s North American profit margin, the percent of revenue it gets to keep, hit a record 11.8 percent for the quarter. The company had set a goal of 10 percent North American margins by next year, but Stevens said GM will achieve the target in 2015, a year early.
Revenue from July through September fell 1 percent to $38.8 billion, but still beat analysts’ forecasts. Almost three quarters of GM’s revenue came from North America.
In China, GM reported pretax income of $463 million, down 4 percent from a year ago, but profit margins rose from 9.6 percent to 9.8 percent because the company sold more expensive Cadillacs and SUVs. “China has not fallen off the cliff as everyone had expected,” Stevens said.
