Sunday, April 26th6.9°C
26075
25546

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

26104


Recent Trending




Today's Market
S&P TSX15408.33+15.98
S&P CDNX697.70-1.78
DJIA18080.14+21.45
Nasdaq5092.08+36.02
S&P 5002117.69+4.76
CDN Dollar0.8210+0.0002
Gold1175.20-17.60
Oil55.50-0.88
Lumber258.50+3.90
Natural Gas2.531+0.002

 
Okanagan Companies
Pacific Safety0.12-0.01
Knighthawk0.010.00
QHR Technologies Inc1.38+0.00
Cantex0.035+0.005
Anavex Life Sciences0.43+0.01
Metalex Ventures0.095+0.000
Russel Metals27.16+0.41
Copper Mountain Mining1.15+0.06
Colorado Resources0.095+0.000
ReliaBrand Inc0.004-0.001
Sunrise Resources Ltd0.04+0.01
Mission Ready Services0.20+0.00
Decisive Dividend Corporation1.80+0.10

 



25990

FEATURED Property
22670341319 Wilson Avenue
6 bedrooms 2 baths
$409,900
more details
image2image2image2
Click here to feature your property
Please wait... loading


What's your score?

There was a time when we would sit down with nothing more than a sheet of paper and a sharp pencil to do the math. Totalling our expenses and subtracting our revenue, the amount left over was the answ...


Do you dare to dream?

Photo: Thinkstock.comI have never been able to understand why some people can only see as far ahead as the end of the current day. Instead of aiming for long term goals, they just wallow in their ever...


Calling on your help!

Has the internet flattened prices as predicted? Has the internet created opportunities for your business to find higher priced markets further afield? Is posting prices on your website a good thing o...

_



26091




Member of BC Press Council


24222