GM earned $255 million, or $0.60 per share, in the fourth quarter of 2001, including the approximately $97 million, or $0.14 per share, unfavourable effect of the currency devaluation in Argentina. This compares with $609 million, or $1.15 per share, in the fourth quarter of 2000, excluding special items.
Go deeper with GlobalData
Overall, the reaction to the results has been quite positive, reflecting the view that they are about in line or slightly better than analysts expectations.
However, GM’s earnings on its automotive operations still showed a hefty decline on year-ago levels.
Fourth-quarter earnings totalled $66 million versus $393 million in the prior-year period. Wholesale volume declined approximately 8 percent in calendar-year 2001, and approximately 6 percent in the fourth quarter, compared with the same periods of 2000.
By region, North American auto operations were the most profitable in the fourth quarter: GM brought in $392 million, down from $979 million in the year-ago quarter. Europe lost $240 million in the fourth quarter, a narrower loss than the $463 million in the year-ago quarter. Asia Pacific also turned a profit of $25 million (helped by Holden) though Latin American operations reported a loss $111 million reflecting ‘pricing pressure from the supplier community, based partially on the decline in value of the Brazilian currency.’
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataGM’s global automotive operations earned $708 million in calendar-year 2001, compared with $3.9 billion in 2000.
Lower sales volume and strong pricing competition affected results in North America, where GM’s annual wholesale vehicle sales declined 11 percent from prior-year levels. Similar pricing pressures affected Europe, along with the shift in consumer preference toward smaller, less-profitable vehicles and unfavorable country mix. Net price retention in calendar-year 2001 was negative 1.3 percent in both North America and Europe.
“Our performance in 2001 was quite strong considering all of the challenges we faced, and we intend to continue building momentum throughout the coming year,” said GM Chairman Jack Smith. “Our market-share gains demonstrate that GM’s dedication to developing innovative new products is paying off in the marketplace. Our focus in the coming year is to build on our market success and make further improvements in our financial performance.”
“We’re in good shape to meet the tough competitive challenges in the year ahead,” said GM President and Chief Executive Officer Rick Wagoner. “We gained momentum in the fourth quarter with our great products and the highly successful Keep America Rolling marketing campaign, ending the year with low U.S. dealer inventories. As we continue to introduce more new models this year, and intensify our focus on efficiencies and cost reductions, we’re well-positioned when the economy rebounds.”
“To translate our market success into higher profits, our global automotive operations continue to focus on improving quality and increasing productivity, and our entire company is concentrating on reducing costs,” Wagoner said. “We’ve targeted significant reductions in material and structural costs for 2002, in addition to reducing non-product-related capital expenditures.”
