General Motors was able to rake in only $190 million in the first half of 2014, an 85 percent drop from the $1.2 billion income it reported a year ago. The company’s numerous and costly recalls, as well as the projected $400 to $600 million GM will give to compensate victims of ignition switch failures, contributed to the dismal numbers.
Nonetheless, Automotive News is reporting that the company is likely to report an even higher income for the second half of 2014. Healthy Chinese sales and high margins on its latest batch of new full-size SUVs will likely keep the company in the black for the rest of the year. GM CFO Chuck Stevens told AN that “average transaction prices…on SUVs jumped $6,000 to $7,000.” Pickup trucks are also supporting the company’s financial success, where the average transaction price grew $5,000.
According to CEO Mary Barra, the company’s recalls are “substantially complete.” With these woes largely behind GM, AN reports that Barclays Capital analyst Brian Johnson predicts that there will be “an opportunity for GM stock to rally in the second half of 2014.”