POSTED: Thursday, May 2, 2013 - 10:00am
UPDATED: Thursday, May 2, 2013 - 10:04am
CNN New York — General Motors earnings fell in the first quarter, but reduced losses in Europe helped the automaker beat expectations, lifting shares Thursday.
The company earned $1.1 billion in the quarter, excluding special charges, down from the $1.6 billion it earned on that basis a year earlier.
Reduced sales in its home North American market and reduced profitability in the international unit that includes China, its largest market, led to the drop in profit.
The South American unit also swung to a small loss from a profit in the 2012 period.
But the company reported progress in stemming losses in Europe, cutting the shortfall in that unit by $119 million to $175 million in the period.
Europe has become a major focus for investor worry about automakers' results.
Shares of GM shot up 4% in premarket trading immediately following the report.
While GM has turned around operations in North America that dragged it into bankruptcy in 2009, Europe continues to be a drain on its operations.
It has lost more than $15 billion in Europe since the start of the century.
Last week, GM announced plans to shut plants it operates in Bochum, Germany, by 2014 as part of an effort to return its European brands, Opel and Vauxhaul, to profitability by 2015.
It has said it plans to invest 4 billion euros, or $5.3 billion, in Europe as part of its turnaround plans.
The problems in Europe are not unique to GM.
A worsening European recession has resulted in the worst industry-wide auto sales on the continent in 20 years.
Last week, Ford Motor reported strong North American results that were dragged down by rising losses in Europe.
German carmaker Daimler AG reported a 60% drop in net profit for the first quarter and warned 2013 earnings will be below 2012 levels.
Volkswagen also warned it is struggling with what it called "ongoing uncertainty in the economic environment."
But it said it still hopes to match 2012 operating profit this year on growth outside of Europe.