GM Pre-Tax Profit Higher than Expected

General Motors pre-tax profit for the third quarter has increased by 37 percent or $3.1 billion thanks to a strong truck and SUV sales in North America and improved performance in China.

According to Reuters, GM reported an 11.8 percent operating margin in North America. It is the ninth straight quarter that GM posted improvements in profits. GM also reported that it expects to surpass its 10 percent margin for this year. Besides its strong sales in North America, it also had improved results in China as the company recently launched its fast-selling SUVs in the world's second-largest economy.

In a report from Bloomberg Business, Barclays analyst Brian Johnson said GM already made $3.1 billion in adjusted earnings before taxes and interest were taken into account. They pulled it off by offering more expensive models in China as the sale of other common cars slowed down. Johnson said Chuck is vindicated on that claim.

The company's Chief Financial Officer Chuck Stevens said early in 2015 that the company has the capacity to sustain profits in China amidst the slowdown of the market. For the last two quarters, GM has been doing better than how it used to in the past. Its stock went up 5.8 percent Wednesday, the biggest increase it has since December 2012. GM's adjusted earnings per share is at $1.50 while analysts estimated it to be only $1.9 average.

Reuters reported that GM's joint-venture profits shares in China for this quarter dropped to $463 million from $484 million last year. However, profit margins increased to 9.8 percent from 9.6 percent. This is due to the high sales of more expensive sport utility vehicles and other luxury cars.

During the quarter, GM reported that it spent $1.5 billion for a settlement of a US Justice Department investigation on mishandled ignition switch recall. This means, the company's total net income is $1.36 billion. This translates to 84 cents a share.