General Motors Co. reported an 80% drop in its second-quarter net profit Thursday, with earnings hit by $1.5 billion in charges related to vehicle recalls and money set aside to fund a compensation plan for victims of car accidents linked to defective ignition-switches.

Earnings during the period equaled $278 million, which reflect preferred dividends, compared with $1.41 billion a year earlier. Excluding certain one-time costs, GM earned 58 cents a share, matching the 58 cents a share analysts expected, according to FactSet.

GM is selling its new vehicles at higher prices in North America while accelerating growth in China—providing the auto maker some financial traction even as it has issued a record amount of recalls.

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