GM earnings jump on strong North America sales, tax benefit

State of New York: General Motors reported a huge jump in fourth-quarter earnings Wednesday on strong operating profits in North America and a big tax benefit in Europe.

Earnings for the quarter ending December 31 were $6.3 billion, more than triple the $2.0 billion in the year-ago period.

Revenues were flat at $39.6 billion.

Some auto industry observers have said the booming US auto market could soon slow, but GM chief financial officer Chuck Stevens expressed confidence the good times will roll a while longer.

"We are well positioned for the downturn, we just don`t think it`s going to happen anytime soon," Stevens told reporters on a conference call.

"We believe that the industry fundamentals and the economic fundamentals specifically to the US are thus that we would expect to see a strong US industry for the next number of years."

Operating profits in North America were $2.8 billion, up 25.4 percent from the year-earlier period. Car sales in North America rose 8.5 percent in the quarter to 927,000 units, with big gains for sport-utility vehicles and pickup trucks.

In its international business, operating profits rose on growth in China which helped offset losses in South America and Europe.

Stevens confirmed that GM expects to break even in Europe in 2016 and suggested it sees no need for further job cuts in the region. Rival automaker Ford said Wednesday it would cut hundreds of jobs in Europe. 

"We`ve got the right cost structure," he said. "Breaking even in Europe in 2016 is a company-wide focus and we feel very confident we`re going to achieve that."

Results were also boosted by a $3.9 billion non-cash benefit on the valuation of some deferred tax assets in GM Europe.

Quarterly earnings translated into $1.39, 18 cents above analyst expectations.

Full-year earnings were $9.7 billion, up from $3.9 billion in 2014.

GM shares rose 1.8 percent to $30.18 in pre-market trade.