General Motors Co.’s net income fell 22 percent for 2013, to $3.8 billion, as a disappointing fourth quarter – especially outside North America – drove fourth-quarter results far below Wall Street’s expectations.
But a $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 percent 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 had expected 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 percent 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 percent 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.
CFO Chuck Stevens said the company would take “a number of actions” to improve its performance in foreign markets, including the previously announced plan to stop manufacturing vehicles in Australia. He said it’s a “fundamentally across-the-board deterioration in earnings” in the international division.
“There’s weakness driven by a number of factors,” Stevens told reporters. “In some markets, it’s foreign exchange. In other markets, it’s pricing because of the weaker yen.”
For the full year, GM’s operating profit rose about 8 percent 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 percent to $155.4 billion, while global vehicle sales increased 4 percent to 9.7 million units for flat global market share of 11.5 percent.
The company’s U.S. market share was flat, at 17.5 percent, for the year, while edging up a tenth of a percentage point, to 17.2 percent, for the fourth quarter.
One bright spot was that GM’s pension obligations of $71.5 billion were 90 percent funded at the end of the year, an improvement of $7 billion from a year earlier.
Globally, GM’s pensions are 80 percent funded, an improvement of about $8 billion.