GM Boosts Revenue, Earnings

February 06, 2019 at 11:50 AM

General Motors Co.’s adjusted net income swung to $2.0 billion in last year’s fourth quarter, reversing a $5.2 billion loss in the same period of 2017 caused by U.S. tax changes.

GM spent $1.3 billion on restructuring in the fourth quarter, mainly in the form of exit payments associated with staff cuts. The company says it expects those costs eventually will reach about $2 billion.

Revenue advanced 2% to $38.4 billion in October-December, as strong demand for trucks overcame a 14% drop in retail unit sales to 2.24 million vehicles. Volume for the period fell 3% to 785,000 units in the U.S. and 25% to 965,000 vehicles in China.

Adjusted pretax earnings for the quarter declined to $2.8 billion from $3.1 billion in 2017. GM says record-high fourth-quarter EBITs for its North American and financial units were offset by a drop to zero EBIT overseas.

For the full year, adjusted net earnings surged to $8.0 billion, reversing a $3.9 billion loss in 2017. Revenue advanced 1% to $147 billion. Adjusted EBIT shrank 8% to $11.8 billion. Retail sales dropped 13% to 8.38 million vehicles.

GM describes its results as “strong,” pointing to it success in offsetting the challenges of rising raw material costs, unfavorable exchange rates and a $1 billion negative impact of new tariffs and trade restrictions.

The company delivered earnings per share of $1.43 in the fourth quarter and $6.54 for the year.