NEW YORK — General Motors reported on Thursday that earnings quadrupled due to solid sales in the United States and China even as revenues were dented by the strong dollar. Earnings for the second quarter were $1.1 billion, up from $278 million last year, and revenue dipped 3.7% to $38.18 billion. GM attributed the drop to the strong dollar.
Operating earnings in North America were roughly double that of last year at $2.8 billion, while earnings in GM International Operations, which includes China, rose 10.8% to $349 million. GM had a smaller operating loss in Europe than last year, but a bigger one in South America.
“The first two quarters of the year were strong as we fully capitalized on a robust North American industry and maintained our strength in China, despite the challenging conditions in that market,” CEO Mary Barra said.
GM’s earnings were negatively affected by charges totaling $1.1 billion. These items included a $600 million charge for a currency devaluation in Venezuela and $400 million writedown on assets, primarily in Thailand. The company also spent an additional $100 million in compensation for victims of accidents due to its ignition switch scandal.
CATERPILLAR: NEW YORK — Heavy equipment maker Caterpillar reported a steep drop in second-quarter profit on Thursday and lowered its full-year sales forecast, citing the sluggish global economy and a stronger dollar.
Caterpillar said profit fell to $710 million in the April-June quarter, down 29% from $999 million in the first quarter. Adjusted earnings tumbled 26% to $1.16 per share. Excluding restructuring costs, earnings per share at $1.27 were in line with market expectations.
Sales fell 13% to $12.3 billion for the company, considered a bellwether of the global economy, with chairman and CEO Doug Oberhelman citing the stronger U.S. dollar as a major factor. “Continuing economic weakness in China and Brazil, as well as uncertainty in the eurozone and over Greece, haven’t helped confidence,” he said.
UNITED: NEW YORK — United Airlines reported record earnings of $1.2 billion for the second quarter Thursday, helped by a $1 billion fall in fuel costs.
Passenger, cargo and other operating revenues fell 2.6% in the April-June period to $9.9 billion, but that was more than offset by the 34% fall in fuel costs, normally the largest cost for an airline, compared with a year ago. Net income was up 51.2% from a year earlier and earnings per share surged 48.1% to $3.14.
The company moved to share some of the boon with shareholders, announcing a $3 billion share repurchase plan through 2017, on top of an existing $1 billion buyback program. “This quarter’s record results reflect the progress we’re making on our long-term plan,” chairman and CEO Jeff Smisek said in a statement.
QUALCOMM: SAN FRANCISCO — Qualcomm, the world’s biggest manufacturer of mobile semiconductors, said Wednesday it was slashing its work force by 15% as part of a “right-sizing” of its cost structure.
The moves are part of a “strategic realignment plan designed to improve execution, enhance financial performance and drive profitable growth.” The plan calls for “aggressively right-sizing the cost structure by eliminating approximately $1.4 billion in spending, including an approximately $300 million reduction in annual share-based compensation grants,” according to a statement.
Qualcomm said separately it posted a profit of $1.2 billion in the past quarter, down 47% from a year ago, while revenues fell 14% to $5.8 billion.
SK HYNIX: SEOUL — South Korean chipmaker SK Hynix reported a 65% on-year increase in second quarter net profit on Thursday, missing analyst estimates, as slowing demand for personal computers and smartphones dampened memory chip prices.
But its shares jumped more than 5% in early morning trade after the company announced a buyback of 22 million shares worth 859.1 billion won ($740.36 million). Net profit came to 1.1 trillion won ($947.96 million) in the April-June period, up from 674 billion won a year earlier, the company said in a regulatory filing.
SK Hynix — Apple’s second-largest chip supplier — is one of the world’s larger makers of memory chips used for personal computers, servers and mobile devices. Apple, which is estimated to account for about 9% of SK Hynix’s total sales, reported sales of 47.5 million iPhones last quarter, missing analysts’ estimates.
Copyright Agence France-Presse, 2015