GM earnings beat Wall Street expectations on strong light truck sales in North America
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General Motors fourth-quarter earnings exceeded Wall Street expectations on strong North American results due to higher light truck sales and despite commodity pressures, foreign exchange challenges and a volatile trade and political environment.
Fourth-quarter net income was US$2.1 billion or US$1.43 per share, topping Wall Street estimates of US$1.25. This result compares a record operating profit of US$3.1 billion for the same period of 2017, but a net loss of US$4.9 billion due primarily to U.S. tax reform.
Adjusted earnings, before interest and taxes, decreased 8.3% to US$2.8 billion, and its global margin declined 0.8% to 7.4%. Revenue increased 1.8% to $38.4 billion.
Those results were based on continuing operations, after the company's sale of its European operations.
For the year, net income rose to US$8.1 billion (or US$6.54 per share) from a loss of US$3.9 billion in 2017.
Adjusted earnings, before interest and taxes, were down 8.3% to US$11.8 billion from 2017, while income from continuing operations increased to US$8.1 billion from US$348 million.
As result of full-year earnings, U.S. union-represented workers will get profit-sharing checks of US$10,750 this year, down from last year's US$11,750.
The amount is based on North American pretax profits, or earnings before interest and taxation. GM's North American pretax profit was US$10.8 billion, down from US$11.9 billion in 2017.
“Results were driven by strong pricing, surging crossover sales, successful execution of the company’s full-size truck launch, growth of GM Financial earnings and disciplined cost control,” said the company in a statement.
GM has endured intense backlash from politicians and the public over the job cuts and its decision to build certain vehicles, such as the new Chevrolet Blazer SUV, in Mexico.
Since last December, all three GM assembly facilities in Mexico are now manufacturing exclusively crossovers, SUVs and pickups.