As results for the Nr.1 US automaker on its North America, Asia and South America regions were far from stellar, General Motors announced a weaker-than-expected fourth-quarter profit, which took its shares down around 2 % in morning trading.
Even though the reported earnings disappointed, analysts predict GM forecasts unchanged with pretax profit rising modestly this year, and margins likely staying flat until 2015.
“I don’t think the story will change much despite what seems to be a disappointing finish to 2013 because the regions that are hurting the most are now the very regions where GM is actually restructuring aggressively,” said Citi analyst Itay Michaeli.
GM Chief Financial Officer Chuck Stevens talked about Europe, where the situation was improving while the results could be further dragged by the rising risks in South America – where Venezuela and Argentina have a gloom sales outlook. Also, outside China, GM’s international regions would still be under pressure, including Southeast Asia, the Middle East, India and Australia.
“Our view is that the sell-side consensus didn’t comprehend that restructuring,” Stevens told reporters. “The final announcement associated with that wasn’t done until early December. Due to that, we needed to book some of the restructuring costs, primarily related to the severance portion of that program.”
GM reported a rising net income, to $913 million, or 57 cents a share, from $892 million, or 54 cents a share, in the year-earlier quarter. The operating profit rose 58 % to $1.9 billion, while the quarter revenue went up 3 % to $40.5 billion, below the $41.08 billion expected by analysts.