DETROIT (WWJ/AP) – Even though General Motors’ fourth-quarter profit fell short of Wall Street expectations, some workers can still expect to see rather hefty profit-sharing checks.
General Motors’ 4Q profit rose 2 percent from a year ago, but the company fell short of 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 percent 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.
“Launches of some of the best vehicles in our history combined with significant improvements in our core business led to a solid year,” GM 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.”
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 $3.8 billion or $2.38 per share. Without one-time items, including $800 million in impairment charges, it earned $3.18 per share.
GM also announced that 48,500 U.S. hourly workers will get up to $7,500 in profit-sharing checks.
Shares fell 4 percent to $33.83 in premarket trading.
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 in 2012.
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.
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