Profits Plunge at General Motors

Joe Raedle/Getty Images(DETROIT) — The troubles continue for General Motors, as the automaker on Thursday reported an 80 percent drop in second quarter profits from this time last year.

GM had previously announced it will pay $400 million to the victims of its defective ignition switches after a wave of lawsuits and $1.5 billion paid out in fines.

The company is now facing some immediate financial repercussions of the more than 29 million cars it has recalled since January. However, overall sales of its vehicles have not been greatly hampered as total revenues increased to $39.6 billion from $39.1 billion last year.

“Our underlying business performance in the first half of the year was strong as we grew our revenue on improved pricing and solid new vehicle launches,” GM CEO Mary Barra said in a statement. “We remain focused on keeping our customers at the center of all we do, and executing our plan to operate profitably in every region of the world.”

GM stock was down more than 2 percent in pre-market trading.

Meanwhile, in other earnings news, Ford Motor beat analysts’ expectations, posting a $2.6 billion profit in the second quarter — up 6 percent from last year and setting a record for operating profit in North America.

American Airlines also had a record-breaking second quarter, reporting a profit of $864 million versus $220 million last year — its highest quarterly profit in company history. The carrier’s total revenue for the quarter also rose by 76 percent to $11.36 billion.

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