General Motors posted a weaker-than-expected fourth-quarter profit on Thursday amid disappointing sales, especially outside the U.S.
Net income rose to $913 million, or 57 cents a share, from $892 million, or 54 cents a share, in the same quarter a year ago. Analysts polled by Thomson Reuters had expected 88 cents a share.
According to Reuters:
“The operating profit rose 58 percent to $1.9 billion. Revenue in the quarter rose 3 percent to $40.5 billion, below the $41.08 billion analysts had expected. GM’s North American operating profit hit $1.88 billion, up from $1.14 billion a year earlier, but that fell short of the $2.04 billion expected by analysts surveyed by Reuters.”
GM also announced up to $7,500 in profit-sharing will be distributed to 48,500 hourly workers in the U.S.
The automaker’s earnings report is in sharp contrast to its Detroit rivals. Ford handily beat Wall Street’s expectation, based on strong North American and Asian sales. Chrysler, despite a merger with Italy’s Fiat, managed to post fourth-quarter earnings that were 74 percent better than the same period a year ago.
“A rough streak in GM’s International Operations, which includes China, continued as the unit’s profits tumbled 69% to $208 million. The company made about $400 million for the quarter in China, while the rest of the division lost about $200 million.”
“GM is slumping in Australia and southeast Asia, where Japanese automakers are flourishing, in part because of the weak yen.”
“The automaker’s Chief Financial Officer Chuck Stevens, says analysts did not fully account for restructuring ahead of plans to close a key Germany plant this year, according to Reuters.”
“Our view is that the sell-side consensus didn’t comprehend that restructuring,” Stevens told reporters. “The final announcement associated with that wasn’t done until early December. Due to that, we needed to book some of the restructuring costs, primarily related to the severance portion of that program.”
The company’s new CEO, Mary Barra, said in a statement: “The tough decisions made during the year will further strengthen our operations. We’re now in execution mode and our sole focus will be on delivering results on a global basis.”