General Motors reports lower-than-expected Q4 earnings
By Tom Krisher, APDETROIT--General Motors' fourth-quarter profit rose 2 percent from a year ago, but the company fell short of Wall Street expectations as it spent heavily to restructure outside the U.S.
February 7, 2014, 12:06 am TWN
GM rode record North American earnings to a profit of US$913 million, or 57 cents per share. That compares with US$892 million, or 54 cents per share, a year ago. Revenue rose 3 percent to US$40.5 billion.
Excluding one-time items, including a US$700 million charge to exit the Chevrolet brand in Europe, GM made 67 cents per share. But analysts polled by FactSet expected 88 cents on revenue of US$40.8 billion.
New CEO Mary Barra said GM's restructuring actions will strengthen the company for the future. New Chief Financial Officer Chuck Stevens said Wall Street analysts “didn't comprehend that restructuring.” Much of the restructuring costs were for employee severance expenses.
For the full year, GM's earnings fell 22 percent to US$3.8 billion or US$2.38 per share. Without one-time items, including US$800 million in impairment charges, it earned US$3.18 per share.
GM also announced that 48,500 U.S. hourly workers will get up to US$7,500 in profit-sharing checks.
Shares fell 4 percent to US$33.83 in premarket trading.
In North America, GM made US$1.9 billion in the quarter before taxes and a record US$7.5 billion pretax for the full year. Stevens said the company's four brands gained market share in retail sales to individual customers, and its transaction prices rose. The company recently has lost pickup truck sales to competitors Ford and Chrysler, which have raised discounts. But Stevens said GM will stick with its approach of selling cars and trucks on value rather than price.
“What we want is profitable growth,” he said.
In Europe, the world's second-largest automaker lost US$800 million for the full year, but that was less than half of the US$1.9 billion it lost in 2012. GM lost US$300 million in the struggling region in the fourth quarter, compared with an US$800 million loss in 2012.
But outside North America and Europe, GM's results were weaker than a year ago.