GM posts decrease in net income; profit-sharing up to $7,500

8:23 AM, Feb 6, 2014   |    comments
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(DETROIT FREE PRESS) - General Motors' net income fell 22% for 2013 to $3.8 billion as a disappointing fourth quarter, especially outside North American, drove fourth-quarter results far below Wall Street's expectations.

But GM's $7.5 billion operating profit in North America will allow GM to distribute profit-sharing checks of up to $7,500 to UAW employees, an increase from $6,750 last year.

GM's net income in the fourth quarter rose 2% to $913 million, but the performance missed Wall Street's expectations by a wide margin. The company recorded operating earnings per share of 67 cents, while analysts were expecting 87 cents.

The automaker still expects a slight increase in global profit for 2014, as it realizes the benefits of redesigning its full-size pickup trucks and other key products.

"Launches of some of the best vehicles in our history combined with significant improvements in our core business led to a solid year," new 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."

For the fourth quarter, GM's operating profits rose 65% in North America. In Europe, where GM has not made money since last century, the company reduced its loss to $345 million from $761 million a year earlier.

A rough streak in GM's International Operations, which includes China, continued as the unit's profits tumbled 69% to $208 million. The company made about $400 million for the quarter in China, while the rest of the division lost about $200 million.

GM is slumping in Australia and southeast Asia, where Japanese automakers are flourishing, in part because of the weak yen.

For the full year, GM's operating profit rose 8% to $8.6 billion. After factoring out several restructuring charges and tax increases - including the fourth-quarter withdrawal of Chevrolet from Europe - net income slipped.

GM said its total revenue for the year rose 2% to $155.4 billion, while global vehicle sales increased 4% to 9.7 million units for flat global market share of 11.5%.

The company's U.S. market share was flat at 17.5% for the year, while edging up a tenth of a percentage point to 17.2% for the fourth quarter.

One bright spot was that GM's pension obligations of $71.5 billion were 90% funded at the end of the year, an improvement of $7 billion from a year earlier.

Globally, GM's pensions are 80% funded, an improvement of about $8 billion.

Detroit Free Press

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