Profits Plunge at General Motors

By ABC News

Jul 24, 2014 9:27am

Morning Money Memo …

ABC News’ John Kapetaneas reports:

It’s a difficult day for General Motors, as the auto giant posted an 80 percent drop in 2nd quarter profits from this time last year. The company 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. GM is facing now some immediate financial repercussions of the more than 29 million cars it has recalled since January, although overall sales of GM vehicles have not been greatly hampered as total revenues increased to $39.6 billion from $39.1 billion last year. GM stock was down more than 2 percent in pre-market trading

Corporate Reports Roll In

In earnings news, pre-market reports once again resulted in a mixed bag of highs and lows. Some of the highlights this morning:

  • Ford Motor beat analysts’ expectations, posting a $2.6 billion profit, or $.40 EPS versus $.36 expected, up 6 percent from last year and setting a record for operating profit in North America.
  • American Airlines recorded its highest quarterly profit in company history, reporting profit of $864 million versus $220 million last year. Total revenue for the quarter also rose by 76 percent to $11.36 billion.
  • Bristol-Myers Squibb posted 2Q revenue of $3.9 billion, a 4 percent decrease from last year.
  • Apparel maker Under Armour recorded a slight increase in profit to $17.7 million, and a 34 percent rise in revenues to $609.7 million.
  • Caterpillar reported a rise in 2Q profits by 4.1 percent, posting per share profits of $1.57, beating its 2013 2nd quarter of $1.45 per share. The company disappointed with its 2Q revenues of $14.15 billion, a slight decrease from last year.
  • Financial advisor Lazard beat analysts’ estimates, more than doubling its last year 2Q profits of $31.4 million, reporting $85.2 million or $.64 per share.
  • Chocolate maker Hershey Co. reported a 5.4 percent rise in revenue while domestic sales rose 4.4 percent.
  • Dunkin’ Brands posted below estimate earnings of $46.2 million or $.43 per share. Revenue was up 4.6 percent to $190.9 million, as domestic store sales rose while international sales fell.
  • Defense contractor Raytheon posted a 12 percent rise in profits to $553 million, up from $493 million last year.

Early Market Boosts

Markets worldwide were up this morning. Markets in Europe were in the green across the board, while Asian economies were also seeing a slight uptick. In the U.S., Dow and S&P futures were up, as earnings season brings positive results across multiple industries, and U.S. jobless claims fall to their lowest levels in eight years.

Still Weird, Now No. 1

There’s a new “king” of the Billboard charts, and it’s not who Gaga, Beyonce or Drake. This morning, funnyman Weird Al Yankovic reigns supreme among recording artists, after his eight-songs-in-eight-days campaign for his new album “Mandatory Fun” sold over 100,000 copies, rocketing him to the No. 1 spot on the Billboard Top 200 for the first time in his decades-long career.

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