General Motors has posted better than expected quarterly financial results on the back of cost cutting and higher transaction prices for GM vehicle sales in North America.
Full-year 2017 EBIT-adjusted was put at US$12.8bn, flat on last year’s record performance. Results were driven by strong performance in North America, improvement in GM International led by strong equity income in China and a return to profitability in South America. GM also said that an intense focus on costs drove performance.
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GM’s net loss for the quarter to Dec. 31 was US$5.15bn which compares with a profit of US$1.84bn, in the same period a year earlier. However, EBIT-adjusted at US$3.1bn was a GM record for a fourth quarter.
Excluding special items such as a charge from the sale of Opel/Vauxhall, adjusted earnings per share came to $1.65, above analyst expectations.
The company noted that results had improved across all segments and that its South American business had returned to profitability in the second half of 2017.
‘Sweeping change’
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By GlobalDataGM said that sweeping change accompanied its record performance in 2017 as it focused resources on its most profitable franchises and sold its Opel/Vauxhall and GM Financial European operations, as well as exited South and East Africa, and India.
GM said it reduced US inventories to align supply with demand.
GM plans to introduce at least 20 new all-electric vehicles by 2023. GM also said it ‘expects to deploy self driving vehicles in a ride sharing environment in 2019’.
In January, GM forecasted its full-year 2018 to be largely in line with 2017’s record performance, building on previous records in 2016 and 2015. The introduction of its all-new full-size pickups later this year is expected to help accelerate earnings in 2019, GM said.
On a consolidated basis (including discontinued operations), GM reported a 2017 net loss of US$3.9bn, driven primarily by charges totalling US$13.5bn. These included a US$7.3bn non-cash charge related to the ‘remeasurement of deferred tax assets’ due to U.S. tax reform, and a largely non-cash charge of US$6.2bn resulting from the sale of Opel/Vauxhall.
In a statement, CEO Mary Barra stressed the attention to core business: “The actions we took to further strengthen our core business and advance our vision for personal mobility made 2017 a transformative year,” she said. “We will continue executing our plan and reshaping our company to position it for long-term success.”
In North America GM reported record Q4 EBIT-adj. and record full-year EBIT-adj. margin of 10.7% — the third straight year above 10% — despite an 11.3% reduction in wholesale volume. Year-ending US inventory was at 63 days supply — down 90,000 units from 2016.
Through December 31, 2017, GM sold 8.9m vehicles globally, an increase of 0.8% from 2016, and grew market share in each of its three key markets.
In the United States, GM sold 3m vehicles, including record sales of crossovers and pickup trucks, helping the company earn record average transaction prices, according to J.D. Power PIN estimates.
GM and its joint ventures sold 4m vehicles in China for the first time. The record sales were anchored by Baojun and Buick, along with Cadillac, which posted a sales increase of 51%.
GM said that global deliveries of electric vehicles were a record last year at 69,500, led by record deliveries of Chevrolet Bolt EV (26,000) and Baojun E100 (11,500).
This year, GM says it will gain the benefit of a full year of volume from the ongoing launches of its newest crossovers, the Chevrolet Traverse, Buick Enclave and GMC Terrain. The company will also introduce the next all-new Cadillac — the XT4 crossover — which will make its global debut this year.
After introducing six new or refreshed models in the fourth quarter in China, GM and its JV partners will ‘launch 15 more in 2018, under the Cadillac, Buick, Chevrolet, Baojun and Wuling brands’.
