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GM Posts $1.4 Billion Net Income in Q3, Ford Profits Drop to $835 Million

Motor Trend logo Motor Trend 10/24/2014 Kelly Pleskot

October is in full swing, and automakers have finished recording financial results for the third quarter. Because of its expensive European transformation plan, Ford logged a net income of $835 million, or $437 million less compared with the same time period a year ago. Meanwhile, General Motors recorded a reduction of its overall net income to $1.4 billion.

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Ford posted global revenue of $34.9 billion and net income of $0.21 per share. Pre-tax profit came out to $1.2 billion, or $1.4 billion lower than last year. The automaker claims that lower volume, increased money spent on honoring warranties, and adverse balance sheet exchange effects are the major reasons for this drop. North America was a profitable region, although overall profit declined by $866 million compared to last year. Meanwhile, U.S. market share dropped to 14.1 percent, down 0.8 percent from a year ago. Another profitable region was Asia Pacific, which reported a third quarter pre-tax profit of $44 million. ford-headquarters-2© Provided by MotorTrend ford-headquarters-2

Ford struggled in South America and Europe last quarter. South America suffered from a pre-tax loss of $170 million while Europe's loss was even greater, coming in at $439 million. However, the loss isn't as steep as last year, and Ford has seen improvements in European market share as well as wholesale volume and revenue. The Middle East and Africa region also incurred minor losses of $15 million.

General Motors reported increased global revenue of $39.3 billion. Net income came in at $1.4 billion, or $0.81 per share. North America was GM's most profitable segment with an EBIT-adjusted net income of $2.5 billion, up from a year ago. According to GM, margins were high at 9.5 percent.

Meanwhile, Europe suffered income losses of $387 million and South America essentially broke even compared to last year. Overall, GM's net income struggled in the third quarter from special item expenses, including a flooding at the GM Technical Center in Michigan and long-lived asset impairments in Russia.

"Strong global sales and growing margins in North America and China helped GM deliver very solid third quarter results,” said GM CEO Mary Barra in a recent statement. “Despite industry challenges in Russia and South America, our earnings were on plan as we continue to execute our customer-focused strategy.”

Source: Ford, GM

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