(USATODAY.com) - General Motors said Thursday that it saw a $125 million gain, or 6 cents a share, in the first-quarter compared to $865 million, or 58 cents a share, in the same period last year despite the costs of its massive ignition-switch recall.
The giant automaker's core business appeared to be largely unscathed. Without one-time losses, it says it made $590 million in operating income as it remains one of the largest players in the still-healthy car business around the world. Analysts were impressed, but say GM still faces issues beyond the recalls.
"There are still uncertainties in the road ahead for GM. We continue to expect a gradual recovery in Europe, South America continues to exhibit...risk, and the U.S. large pickup segment remains volatile," wrote Brian Johnson of Barclays in a note to investors.
It made $557 million in operating income in North America after a $1.3 billion charge related to the recall. It compares to $1.4 billion a year ago.
GM shares were up in early trading at about $35.63, up about $1.21.
"The performance of our core operations was very strong this quarter, reflecting the positive response of customers to the new vehicles we are bringing to market," said GM CEO Mary Barra in a statement. " Our focus remains on creating the world's best vehicles with the highest levels of safety, quality and customer service, while aggressively addressing our business opportunities and challenges globally."
Revenue was $37.4 billion, up from $36.9 billion last year.
GM has estimated that replacing the ignition switches on 2.6 million cars worldwide will cost an estimated at $1.3 billion, a figure that it has repeatedly revised upward as the recall broadened. Most of the vehicles involved are from 2003 to 2007. In addition, GM was taking a charge for South America mostly related to currency devaluation.
Although GM was able to stay profitable, Barra devoted part of her conference call with analyst to the impact of the recalls. She noted all the steps that the automaker is taking to improve safety and address problems sooner, besides a safety czar within the company and more oversight, she says a 24-hour hotline is being established that employees can use to report potential safety problems.
She says GM is a changed company. "We are a company that has demonstrated being proactive at every turn," she says. The culture change is accelerating, GM is producing "truly great product," and is looking to seize opportunities, not just deal with challenges.