Tuesday, September 2nd13.4°C
22736
22952

GM fourth-quarter profit rises 2 per cent; adjusted profit misses Wall Street forecasts

DETROIT - General Motors' fourth-quarter net profit rose 2 per cent from a year ago, but the company fell short of Wall Street expectations as it spent heavily to restructure outside the U.S.

GM rode record North American earnings to a profit of $913 million, or 57 cents per share. That compares with $892 million, or 54 cents per share, a year ago. Revenue rose 3 per cent to $40.5 billion.

Excluding one-time items, including a $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 $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 per cent to $3.8 billion or $2.38 per share. Without one-time items, including $800 million in impairment charges, it earned $3.18 per share. Before taxes and restructuring costs, the company said it made $8.6 billion for the year, up $700 million from last year.

GM also announced that 48,500 U.S. hourly workers will get up to $7,500 in profit-sharing checks.

Shares fell 50 cents, or 1.4 per cent, to $34.74 in Thursday morning trading.

Citi Investment Research Analyst Itay Michaeli told investors in a note that he doesn't see GM's results as a story-changing quarter. "Weakness is isolated to regions where GM is aggressively restructuring throughout 2014," wrote Michaeli, who has a $48 one-year price target on the stock.

But Stifel analyst James Albertine wrote in a note that GM's European restructuring may take longer and be more expensive and risky than management is saying. GM still expects to break even before taxes in Europe by the middle of this decade.

In North America, GM made $1.9 billion in the quarter before taxes and a record $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 $800 million for the full year, but that was less than half of the $1.9 billion it lost in 2012. GM lost $300 million in the struggling region in the fourth quarter, compared with an $800 million loss a year earlier.

But outside North America and Europe, GM's results were weaker than a year ago.

GM earned $1.2 billion in its international operations, which include Asia, for the full year, down by more than half from $2.5 billion the prior year. GM's international operations earned $200 million in the fourth quarter, down from $700 million in 2012.

GM's operating profits also fell in South America, where it earned $300 million for the full year, down from $500 million in 2012. Fourth-quarter earnings were flat, compared with a $100 million profit in 2012.

The Canadian Press


Read more Business News

22551


Recent Trending




Today's Market
S&P TSX15619.08-6.65
S&P CDNX1010.88-13.11
DJIA17067.56-30.89
Nasdaq4598.188+17.917
S&P 5002002.28-1.09
CDN Dollar0.9151+0.0003
Gold1268.10+3.10
Oil93.13+0.25
Lumber350.50+0.80
Natural Gas3.946+0.008

 
Okanagan Companies
Pacific Safety0.20+0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.18-0.01
Cantex0.08+0.01
Anavex Life Sciences0.24-0.01
Metalex Ventures0.07-0.005
Russel Metals36.42-0.06
Copper Mountain Mining2.90-0.03
Colorado Resources0.165-0.015
ReliaBrand Inc0.100.00
Sunrise Resources Ltd0.0250.00
Mission Ready Services0.225-0.02

 



22689

FEATURED Property
20606915242 cobble Cresent
5 bedrooms 3 baths
$559,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Manage your behaviour

You can’t manage what you can’t control! You can’t manage the number of sales you’re going to make but you can manage the behaviour that will help you make those sales. Obvious...


At the Core: Lessons in pricing from Apple

Apple has taught many entrepreneurs the importance of design, how to create buzz when introducing new products to the marketplace, how to pioneer new technology and the importance of superior quality....


New Real Estate Brokerage in town

Move over “big guys” there’s a new brokerage in town featuring local expertise, long standing experience and a fresh boutique approach. Kelowna, August 31 2014 – You may have...

_





22692


Member of BC Press Council