GM: Good results, despite Europe loss

NEW YORK (CNNMoney) -- General Motors reported strong first-quarter earnings on good results in its home market Thursday, but its bottom line took a hit from rising losses and special charges in Europe.

The world's largest automaker reported operating earnings of $2.2 billion, excluding special items, up from the $2 billion it earned on that basis a year earlier.

That means it earned 93 cents a share excluding special items, down slightly from 95 cents on that basis in the prior year, but far better than the 85 cents a share forecast by analysts surveyed by earnings tracker Thomson Reuters.

Still, charges related to writedowns of assets in Europe and other items reduced net income for the company to $1.3 billion, down from the $3.4 billion it earned a year earlier, when nearly half its profit came from one-time gains from sales of GM's interests in Delphi Automotive and Ally Financial's preferred stock.

GM (GM, Fortune 500) reported operating earnings of $1.7 billion in its North American auto unit when excluding special items, up from $1.3 billion on that basis in the first quarter of last year. The company also raised its industry-wide U.S. sales target for the year by 500,000 vehicles to between 14 million to 14.5 million. Other forecasters have already raised raised their targets to that range.

GM did say it believed the stronger U.S. sales will allow its North American profits to be roughly equal to first quarter results in the second and third quarters.

But the outlook is much bleaker in Europe. GM's unit there swung to an operating loss of $256 million from a $5 million profit in the prior year. And that loss doesn't include a $590 million special charge related to the write-down of its European assets.

"Europe remains a work in progress," said GM CEO Dan Akerson. "We'll continue to work on both revenue and cost opportunities until we have brought GM to competitive levels of profitability."

Industrywide auto sales in Europe have fallen sharply as the sovereign debt crisis sent unemployment over 10% across the European Union and placed at least a dozen countries there into recession.