Remember meForgot password?
    Log in with Twitter

article imageGeneral Motors shows stronger-than-expected fourth-quarter profit

By Karen Graham     Feb 6, 2019 in Business
It looks like Mary Barra's restructuring plan is beginning to pay off. GM's fourth-quarter earnings, released Wednesday, beat Wall Street expectations on tighter cost controls and higher truck sales.
General Motors posted an $8.1 billion net profit in fourth-quarter earnings thanks to high-end pickup and crossover sales in its North American market, according to Reuters.
All of the company's profits came from North America, where sales of many smaller SUVs rose and the average sale price of a GM vehicle hit a record of $36,974, the company said. The company's Chevrolet Silverado pickup actually saw faltering sales in the fourth-quarter.
GM made $10.8 billion in 2018, before taxes, down about 9.0 percent from 2017. But it still played out well for profit-sharing checks, with about 46,500 union workers in the U.S. They will take home $10,750 each, less than last year’s $11,500.
CNBC News breaks GM's fourth-quarter earnings down. Here's what GM did in 2018, compared with what Wall Street expected:
*Adjusted earnings: $1.43 per share vs. $1.22 per share estimated
*Revenue: $38.4 billion vs. $36.48 billion expected
GM shares were up 1.8 percent Wednesday morning after rising nearly 4.8 percent in premarket trading.
"GM delivered another strong year of earnings in a highly volatile environment in 2018," GM Chief Executive Mary Barra said in a statement. "We will continue to make bold decisions to lead the transformation of this industry and drive significant shareholder value."
“We can’t run at a 70 percent utilization,” Barra said Wednesday about the company’s plant usage rate. “We had to improve that ... It’s a transition we have to go through.” She was referring to an industry rule of thumb that says automakers’ lose money when plants operate below 80 percent capacity.
Picking up on the poor sales figures for GM in China, CFRA analyst Garrett Nelson told CNBC by email: "We are very concerned about GM's worsening vehicle sales trends (down 13.5% in Q4) and the company's exposure to a slowing China market, which we think could challenge the company's ability to hit their full-year earnings guidance introduced last month."
“Our outlook for China overall is for the auto industry to be flat year over year,” Chief Financial Officer Dhivya Suryadevara told reporters, according to the Associated Press. “If you take a look at some of these economic indicators coming out of China, there are early signs of stabilization.”
More about General motors, fourthquarter, profitsharing checks, Pickup trucks, Business
Latest News
Top News