General Motors worker Edward Houie moves a Chevrolet Volt door into position… (Paul Sancya, Associated…)
General Motors Co.'s profit almost doubled in the second quarter, bolstered by higher prices for cars and a gain in market share.
GM said it earned $2.5 billion, or $1.54 a share — an 89% increase over the $1.3 billion, or 85 cents, it earned in the same quarter a year earlier.
It was the company's sixth consecutive profitable quarter.
Revenue in the three-month period ended June 30 rose almost 19% to $39.4 billion.
"GM's investments in fuel economy, design and quality are paying off around the world, as our global market-share growth and financial results bear out," said Dan Akerson, the automaker's chief executive.
So far this year, GM has sold nearly 1.5 million vehicles in the U.S., up 16% from the same period a year earlier, according to Autodata Corp. That compares with an industrywide rise of about 11%.
GM has gained almost a full point of market share so far this year and now accounts for 20% of the U.S. auto market.
"We had a solid quarter. Each region posted a profit. Our cash flow was strong," Akerson said.
Akerson credited the large profit in North American operations to "stronger sales of fuel-efficient vehicles across the portfolio."
Higher prices also are helping the automaker.
GM has raised prices three times this year, pushing up the average price for one its vehicles about $500, or 1.9%. At the same time, the company has slashed the money it is putting into sales incentives, spending about $800 less per vehicle on average in the second quarter than it did in the first.
"GM has had some undeniable success with its small car products in the U.S. Whether by luck or good strategy, the Chevy Cruze has become the second-highest-selling compact car in 2011 despite being an all-new nameplate," said Jessica Caldwell, an analyst for auto information company Edmunds.com.
The automaker has been helped by experiencing only minor supply and disruption problems from the Japanese earthquake and tsunami in March. Two of its biggest competitors, Toyota Motor Corp. and Honda Motor Corp., however, had to shut factories in Japan and reduce production at their U.S. plants because of the disaster. Production at those two automakers is only now approaching normal levels.
Still, "the outlook for GM remains positive for the rest of 2011, based on the expected overall recovery in new vehicles sales as well as the seasonality favoring GM's more profitable larger vehicles," said Jesse Toprak, an analyst at auto information company TrueCar.
Also on Thursday, GM said it would add a compact luxury sedan, code named ATS, to Cadillac's 2012 lineup. The car will compete with the BMW 3 series sedans, fill a gap in Cadillac's range of models and try to introduce younger drivers to the brand. GM also plans to introduce a full-size XTS front-wheel-drive luxury sedan — the type of vehicle that has traditionally appealed to Cadillac's older, core buyers.
GM shares sank $1.22, or 4.5%, to $25.95 amid a plunge in the overall stock market.