General Motors said that it has a disappointing outlook for the next six months at its core market in North America as it revealed its concerns about the recovery of the U.S. economy. The first quarter profits of GM declined to $1 billion, surpassing expectations. Its revenue in the first quarter grew by 4% to $37.8 billion while the global profit margins had a slight improvement from 5.6% to 5.8%.
GM reported earnings of $1.7 billion in North America compared with $1.3 billion the prior year on an operating basis. GM said that its profits got a boost from the stronger pricing even as its market share in the U.S. dropped by 19.6% to 17.5% for the entire 2011.
GM said that profitability in the area is expected to stay level until the second and third quarters as it gets ready to convert plants to make a new generation of full-sized pickup trucks. GM was able to increase its operating margin in North America to 7%, from 5.6% the past year, higher than the 5% figure that the U.S. automakers had hoped to achieve.
Its rival, Ford Motor Co., posted a 16% increase in operating profit in North American during the first quarter to $2.1 billion, with a profit margin of 11.5%.
In the European region where GM has tried hard to restore profits for years and industry-wide new vehicle sales have become weaker, it reported $256 million in losses – a drastic difference from the $5 million profit posted a year ago. In the latest period, GM's international operations (including China, Russia and other emerging markets) posted earnings of $529 million. But just a year ago, it posted a profit of $586 million.