GM profits drop 17%, hit by UAW strike and slump in sales

  • General Motors on Wednesday released fourth quarter and full year financial results that largely met investor expectations.
  • Annual profits fell 17% in 2019, thanks in large part to a loss of $ 232 million in the fourth quarter.
  • A 40-day strike by unionized workers took a $ 2.6 billion share of GM’s balance sheet, the company said.

DETROIT (AP) – Despite a 40-day strike by factory workers and falling sales in the United States and China, General Motors still made money last year.

The company posted a profit of $ 6.58 billion for the year, but that figure was down almost 17% from 2018.

GM couldn’t avoid the red ink in the fourth quarter, however. The automaker lost $ 232 million, or 16 cents a share, largely because most strikes by the United Auto Workers union took place in the quarter.

Excluding one-off items for employee departures and the sale of a Chinese joint venture, GM made 5 cents a share, far exceeding Wall Street estimates. Analysts polled by FactSet had expected earnings of 1 cent per share.

Revenue for the quarter was $ 30.8 billion, down nearly 20% from a year ago. That fell short of Wall Street’s estimate of $ 31.2 billion.

The company still earned $ 8.2 billion in North America for the full year, so about 47,000 US factory workers will receive $ 8,000 in profit sharing checks this month. That’s down from $ 10,750 in 2018.

GM said the strike, which ran from Sept. 16 to Oct. 25, cost the company sales of 191,000 vehicles and reduced quarterly pre-tax profit by $ 1.39 per share. For the entire year, the strike cost GM $ 1.89 per share, the company said.

The bitter strike crippled GM’s U.S. factories and cut production in the U.S. and Canada before it was settled.

The company expects pre-tax earnings of $ 5.75 to $ 6.25 per share this year, roughly stable from 2019 when strike costs and profits from its investment in ride-sharing company Lyft and the PSA Peugeot share subscription warrants in France will be canceled.


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