GM Zooms Past Forecasts

GM said the North America improvements reflect favorable mix and reduced structural costs. These savings were partially offset by lower volume, favorable policy and warranty adjustments in the prior-year period and unfavorable foreign exchange rates.

"GM is continuing to execute well in terms of cost cuts," says Toomey.

Like Ford, GM also benefited from strong growth overseas, where it derived more than 60% of its sales for the quarter.

On a conference call with analysts, GM CEO Rick Wagoner said he was optimistic about continued growth from emerging markets like China and Russia. He noted that the U.S. economy and auto market "remains challenging."

GMAC Financial Services, in which GM owns a 49% stake, reported net income of $293 million for the second quarter. That was down from $787 million in the second quarter of 2006, which included a one-time gain on the sale of a regional homebuilder of $259 million.

GM recognized $139 million in net income attributable to GMAC.

The financial performance at GMAC represents a $598 million improvement over the first quarter, which was slammed by pressures in the subprime mortgage market.

GMAC's automotive finance, insurance and other operations -- which exclude its home mortgage business -- generated more than twice the net income of these same operations in the year-ago period.