GM posts strong second quarter, jolting stock

General Motors turned a profit of $2.9 billion in the second quarter, exceeding Wall Street's expectations as sales growth recovered in China and Americans continued buying expensive trucks, sport-utility vehicles and crossovers.

On an earnings-per-share basis, GM made $1.86, better than the average estimate of $1.51 from 14 analysts surveyed by Thomson Reuters.

The company also raised its earnings guidance for the full year to between $5.50 and $6 per share from a previous range of $5.25 to $5.75.

GM shares soared 5.6% to $33.25 in pre-market trading as investors cheered the encouraging news.

Revenue for the April through June period rose to $42.4 billion from $38.2 billion in the year-earlier quarter.

The results were GM's best for any quarter since it emerged from Chapter 11 bankruptcy in July 2009.

"This was an outstanding quarter for GM," Chairman and CEO Mary Barra said in a statement. "Our results were generated by strong retail sales in the U.S., record sales in China and a continued emphasis on improving performance of our operations worldwide."

Once again, North America carried most of the load. The automaker earned $3.6 billion before taxes in its home market.

Americans are buying and leasing new vehicles at about the same pace as 2015's record pace. More than its domestic competitors, however, GM has de-emphasized sales to rental car fleets because they are less profitable, on average, than retail sales to individual consumers.

So far that strategy seems to be working. Before taxes, GM's North American profit margin increased to 12.1% in the quarter from 10.5% a year earlier. In other words, the company made more money selling fewer vehicles between April and the end of June than it did a year ago.

The North American profit increase also came despite increased discounts and 0% financing on the Chevrolet Silverado, the company's very profitable full-size pickup truck.

It also made $100 million in Europe, its first profit that region since the second quarter of 2011.

The only money-losing region was South America where GM lost $100 million, about the same as a year earlier.

In China GM reported equity income of $500 million from its joint ventures. Sales of those joint ventures increased 11.8% from the second quarter of 2015.

GM Financial, the automaker's financial unit, earned $300 million before taxes, up from $200 million a year earlier.