General Motors Co. (GM), struggling to turn around its money-losing Opel unit, said second-quarter profit slid 38 percent, less than analysts had estimated, as losses in Europe weren’t as steep as projected.

Net income attributable to stockholders declined to $1.85 billion from $2.99 billion a year earlier, Detroit-based GM said today in a statement. Excluding some items, profit slipped to 90 cents a share, down from $1.54 a year earlier. That beat the 75- cent average estimate of 15 analysts surveyed by Bloomberg.

The adjusted operating loss in Europe, including Opel, totaled $361 million compared with a $102 million profit a year earlier, GM said. While the performance beat the $440 million average operating loss estimate of four analysts surveyed by Bloomberg, Chief Financial Officer Dan Ammann wouldn’t predict second-half results or when the unit will return to profit.

“We’re taking a lot of very decisive actions around Europe and we have been for a number of quarters now,” Ammann told reporters today in Detroit. “If we’re talking about the general European economy and the industry overall, we continue to see a very challenging environment in the second half.”

GM rose 1.7 percent to $19.99 at 8:04 a.m. New York time, before regular trading. The shares tumbled 40 percent through yesterday since its November 2010 initial public offering.

10th Profit

The second-quarter results, GM’s 10th straight profitable quarter, were helped by continued profits in North America and Asia where sales have been growing. Adjusted operating profits in North America fell to $1.97 billion and in Asia slid to $557 million. GM had an operating loss in South America of $19 million.

After dividends and other costs related to preferred stock, GM reported a second-quarter profit of $1.5 billion attributable to common stockholders.

Stemming losses in Europe is just one challenge before Chief Executive Officer Dan Akerson. He’s also grappling with declining market share in the U.S., a stagnating market in China and the ramifications of ousting his chief marketing officer, Joel Ewanick, this week. At least four top executives at GM’s Opel unit, based in Ruesselsheim, Germany, are being replaced.

“People want to get a sense for how bad Europe is going to get,” Colin Langan, an industry analyst at UBS Securities LLC, said in a telephone interview. “I don’t think many people will disagree it’s going to be negative for at least several more years. But it’s a question of how negative and how much of a drag it’s going to be.”

‘Embedded Value’

Hedge-fund manager David Einhorn, chairman of Greenlight Capital Re Ltd. (GLRE), said on a conference call this week that GM is poised to rebound because there “is further embedded value.”

GM’s $18.80 close on July 25 was the lowest since the IPO. The U.S. Treasury Department sold 28 percent of GM at $33 a share in the offering and still holds a 32 percent (GM) stake, acquired as part of the $50 billion bailout by the Obama administration.

“The biggest fear is the unknown of the macro economy as it relates to Europe,” Ammann said in an interview on Bloomberg Television’s “Surveillance.” “No one knows what the bottom is as it pertains to Europe.”

GM lost $16.4 billion in Europe since 1999 through this year’s first half.

Langan, the UBS analyst, increased estimated full-year losses for GM Europe to $1.6 billion from $1.3 billion earlier this year.

‘Five Years’

“I’m baking in a loss in Europe for the next five years,” he said. “They have a long way to go in Europe. The problem with Europe is that maybe the market itself won’t collapse this year but it’s probably not going to recover so it’s going to be stagnation.”

Adam Jonas, an analyst with Morgan Stanley, also increased his estimate for GM losses in Europe this year to $1.4 billion. He previously lowered the projection to $1 billion after starting the year at $1.2 billion to $1.3 billion.

European economic weakness may affect the second half of the year, Akerson said June 28 in Chicago. GM’s forecast in May was the second and third quarter in North America would be comparable.

GM’s global sales rose 2.9 percent to 4.67 million vehicles during the first half of the year. The automaker was helped its Chevrolet brand, which had its best quarter on record, the company said, with global sales rising 2.3 percent to 1.3 million during April through June.

GM’s pace of growth isn’t fast enough to keep ahead of Toyota Motor Corp. (7203) globally. Toyota’s worldwide sales surged 34 percent in 2012’s first half to 4.97 million, putting the Toyota City, Japan-based company on pace to regain the top spot.

“Our results in North America, our international operations and at GM Financial were solid but we clearly have more work to do to offset the headwinds we face, especially in regions like Europe and South America,” Akerson said in today’s statement.

To contact the reporter on this story: Tim Higgins in Detroit at thiggins21@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net