Sales of General Motors' full-size pickups rose a combined 15.5% in the third quarter, helping to drive a strong profit in North America. Image source: General Motors.

It's no secret that pickup trucks and SUVs are hot sellers in the U.S. right now, thanks to cheap gas and continued low interest rates. General Motors (NYSE:GM) announced its third-quarter results on Wednesday, October 21, and big sales of trucks and SUVs were big factors in its strong operating result.

General Motors results: The raw numbers

 Q3 2015 Q3 2014Growth (Decline) YOY
Net Revenue $38.8B $39.3B (1.4%)
EBIT-adjusted $3.09B $2.26B 37%
Special Items $1.48B $321M 461%
Net Income $1.36B $1.47B (7.5%)

What happened during the quarter
As you can see, "special items" were an important story in the third quarter. There were two, both related to the company's 2014 recall scandal. As part of an agreement with the U.S. Department of Justice to defer prosecution of GM for crimes related to the delayed recalls, GM paid $900 million to the government. It also paid $575 million to settle a batch of lawsuits filed by victims and families. Both were expected.

The charges were substantial, but they were largely offset by the big jump in operating income, what GM calls "EBIT-adjusted." North America had a lot to do with that jump, but good results in China and narrowed losses in Europe also contributed. Here's a look at results for each of GM's five principal business units.

  • In North America, GM earned a record $3.3 billion before taxes, with a margin of 11.8%. Those are outstanding results that reflect continuing strong sales of GM's high-margin pickups and SUVs, as well as continued discipline around incentives and cost controls. Short supplies of rival Ford's (NYSE:F) F-150 pickups gave GM an opportunity in that lucrative market segment this year; the latter has taken full advantage.
  • In Europe, GM lost $231 million, an improvement over a $387 million loss last year. Ongoing restructuring efforts are having a positive effect, and GM expects the unit to return to profitability next year after years of losses.
  • GM South America lost $217 million, a decline from a $32 million loss a year ago. Difficult economic conditions in big markets (including Brazil) hurt; price increases and good sales of some new products helped somewhat.
  • GM International Operations earned $269 million, up from $259 million a year ago. The result includes about $500 million in income from its joint ventures in China; GM's sales in China have fallen as the market has slowed, but its sales of high-profit SUVs have soared. That has helped keep earnings and margins (9.8% in the third quarter) strong. The China result was offset by lower sales volumes in India and Africa.
  • GM Financial earned $231 million, up from $205 million a year ago. Net revenue of $1.7 billion was a record for the unit. U.S. dealer penetration is improved, credit performance was stable.

GM's overall EBIT-adjusted profit margin was 8% in the third quarter, up from 5.8% in the year-ago period

What management had to say
"These results reflect our work to capitalize on our strengths in the U.S. and China, while taking decisive, proactive steps to mitigate challenges elsewhere," GM CEO Mary Barra said in a statement. "GM is a vastly different company today than just five years ago. We're building a strong foundation, driving earnings growth in our core business and executing a plan to lead the future of personal mobility, all with the aim of creating shareholder value for years to come."

Looking ahead
GM's full-year guidance is unchanged: It still expects EBIT-adjusted and profit margin to improve over 2014 full-year results. 

The new-for-2016 Chevrolet Malibu will begin arriving at dealers during the fourth quarter. Image source: General Motors.

In the near term, GM is looking forward to the launch of the all-new 2016 Chevrolet Malibu sedan, a much-improved model that is expected to deliver significantly higher profits per sale. The midsize sedan segment has been dominated by import brands for years, but Ford has been able to make big gains with its current Fusion sedan. The new Malibu looks set to give the Fusion -- and the imports -- some serious competition.

Further out, Barra's plan for GM involves changes intended to deliver significantly higher profits and margins by early next decade. The plan is in its early stages, but Barra and CFO Chuck Stevens both emphasized that it's unfolding as anticipated. 

John Rosevear owns shares of Ford and General Motors. The Motley Fool recommends Ford and General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.