DETROIT - A turnaround in South America and a rosier outlook in Europe helped push General Motors shares up Wednesday, even though the company's third-quarter net profit fell 14 percent.
GM Chairman and CEO Dan Akerson described the period as a "solid quarter in almost all aspects," despite the company earning $1.48 billion in the three-month period ended Sept. 30, down from $1.73 billion a year earlier. European pretax losses widened and North American profits fell.
But South America swung to a big profit, and GM posted better-than-expected results internationally outside of China.
GM also said it has cut 2,300 jobs in Europe this year through employees leaving and early retirements, with a target of 2,600. Further cuts will be made depending on sales. The cuts will help the company trim $300 million in costs this year, Vice Chairman Steve Girsky said in a conference call from Detroit Wednesday morning.
A company buyout of North American salaried retiree pensions also is benefiting the company's bottom line.
The automaker's quarterly performance, while down from last year, is a sign that steps taken to fix some troubled business units are working.
''The Chevrolet brand is clearly on a roll,'' Akerson said, noting it is in its eighth consecutive quarter of increased global sales. Specifically, Akerson noted the small car sales, including the Lordstown-built Cruze, have helped drive a 63 percent increase in passenger cars since fall 2010.
Company officials also have high hopes for the launches of upgraded models, including the Chevy Silverado pickup truck and the Impala and Malibu sedans.
Competitor Ford Motor Co., by comparison. reported Wednesday that North American and Chinese buyers helped Ford reach better-than-expected third quarter numbers, earning about 3 percent less than a year ago, compared to GM's 14 percent drop.
GM officials responded by saying the company expects to bounce back competitively in North America, noting GM will be going from having the oldest portfolio in North America to the freshest portfolio.
Also during the third quarter, approximately 30 percent of eligible U.S. salaried retirees accepted GM's offer to take a lump sum payout rather than ongoing pension benefits.
In addition, GM expects to close in early November a previously announced transaction in which The Prudential Insurance Company of America will assume responsibility for pension obligations covering GM's remaining eligible U.S. salaried retirees.
Retirees in the pension plan should see no change in their benefits, yet the plan is expected to eliminate about $29 billion of the company's U.S. salaried pension liability.
Worldwide, GM earned 89 cents per share, compared with $1.03 per share a year ago. Revenue grew 2.5 percent to $37.6 billion. Excluding one-time items, GM made 93 cents per share, easily beating Wall Street expectations of 60 cents.
That drove GM shares up $1.61 or 6.9 percent, to $24.89 in morning trading Wednesday.
Chief Financial Officer Dan Ammann said the improved performance in South America and countries like South Korea and Australia shows that moves to fix the business are working.
"We can make those improvements and deliver the results," he said.
The company also predicted its fourth-quarter pretax earnings would be about the same as last year's $1.1 billion. GM expects to break even in Europe by the middle of the decade as it rolls out new, more appealing products. And the company expects a full-year European pretax loss of $1.5 billion to $1.8 billion in 2012, improving slightly in 2013. That's a little more than double what GM lost in Europe last year.
GM lost $478 million pretax in Europe last quarter, compared with a $292 million loss a year earlier. In North America, pretax profit fell 17 percent to $1.8 billion as lower pension income and higher costs for warranty claims offset lower raw material and freight costs.
''Despite the terrible economic environment in Europe, we are not sitting still,'' Girsky said. ''The Opel is not an island into itself. It's an integral part of the company.''
He was referring to GM's European automobile line.
''Our brand image has deteriorated the last several years,'' Girsky said of the European market. ''We are working very hard to bring it back to where we were and, frankly, better than that. We know our product is good.''
A European ad campaign allowing buyers to return the car if they don't like it, soccer sponsorships and other marketing efforts are already showing results, Girsky said.
But in South America, the company swung from a $44 million loss last year to a $114 million profit on the strength of new models. And GM's international operations, fueled mainly by areas outside of China, nearly doubled its pretax profits to $689 million.
The company is confident enough to predict break-even results in Europe because of significant investment in new products, including the Mokka small SUV and Adam small car, Ammann said. The company already has 40,000 orders for the Mokka, he said.
"We have to lead with product in order to sustain and grow the top line," he said.
GM also is making progress on reducing factory capacity and other costs, he said. And it isn't expecting improvement in Europe's troubled economy anytime soon, Ammann said.
"We're not banking on a sharp turnaround in the European economy at this point," Ammann said.
Associated Press auto writer Tom Krisher and Tribune Chronicle business writer Brenda J. Linert contributed to this story.