DETROIT – General Motors’ recalls took a $1.2-billion pre-tax bite out of its second-quarter profits, for a bottom line net income of $0.2 billion, or 11-cents per diluted share. Earnings before income taxes (EBIT) totaled $1.4 billion, off $900 million versus the second quarter of 2013.
Revenue was up for the quarter, at $39.6 billion, compared with $39.1 billion for Q2 ’13. General Motors’ North American EBIT was $1.4 billion, which included $1 billion in recall-related costs for the quarter, compared with $2.0 billion for the quarter a year earlier.
Unlike Ford Motor Company, GM’s European operations continued to suffer losses. It reported a $0.3 billion loss for Q2 ’14, which included $0.2 billion in restructuring costs. General Motors Europe lost $0.1 billion in Q2 ’13. South American operations lost $0.1 billion in Q2 ’14, compared to a $0.1 billion EBIT-adjusted profit in Q2 ’13.
General Motors’ International operations EBIT was $0.3 billion, up from $0.2 billion.
General Motors took a special charge of $0.4 billion for its ignition switch compensation program. “There is no cap on this program,” General Motors said in a press release, “but this charge is the company’s best estimate of the amounts that may be paid to claimants.” The program will compensate people injured in, and the families of those killed in, accidents related to the widespread ignition-switch recall.