Although fourth quarter profits rose year on year, recall costs and other items took a toll on General Motors’ full year results as revenues were essentially flat though the automaker remained in the black despite increased losses in Europe and challenges in South America.
Q4 net income was $1.1bn after a $0.9bn hit related to the redemption of all outstanding Series A preferred shares. Fourth quarter 2013 net profit was $0.9bn after $0.2bn of special items. Revenue in the fourth quarter of 2014 was $39.6bn compared with $40.5bn the previous year.
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Earnings before interest and tax (EBIT) adjusted was $2.4bn in the fourth quarter of 2014, compared with $1.9bn in the fourth quarter of 2013.
Full year 2014 net income of $2.8bn was down from $3.8bn in 2013.
“Core automotive operating performance improved in 2014, but results were more than offset by incremental recall and restructuring costs, and a net loss from special items,” GM said in a statement.
Net profit was affected by recall-related pre-tax costs of $2.8bn. Revenue increased to $155.9bn, compared with $155.4bn in 2013.
Full year EBIT adjusted was $6.5bn, compared with $8.6bn in 2013 after charges of $2.8bn for recall-related costs and restructuring charges of $1.0bn.
“Based on GM’s continued strong results, and consistent with its stated strategy of a strong and growing dividend, the company intends to increase the second quarter dividend on its common stock by 20 percent to 36 cents per share,” GM said.
GM North America (GMNA) reported EBIT adjusted of $2.2bn in the fourth quarter of 2014, compared with $1.9bn in 2013. Full year EBIT adjusted was $6.6bn, which included the impact of $2.4bn in recall-related costs in 2014. EBIT adjusted was $7.5bn in 2013. Around 48,000 hourlypaid employees will receive bonuses of up to $9,000.
GM Europe (GME), long loss making, saw no improvement with Q4 EBIT adjusted of $(0.4)bn including $0.1bn for restructuring costs, the same as in the previous year. Full year EBIT adjusted was a $1.4bn loss in 2014, including $0.7bn of restructuring costs, compared with a $0.9bn loss in 2013, which included $0.2bn in restructuring costs.
GM International Operations (GMIO) reported EBIT adjusted of $0.4bn in the fourth quarter of 2014, compared with $0.2bn in 2013. Full year EBIT adjusted was $1.2bn in 2014, compared with $1.3bn in 2013. GM China equity income during the fourth quarter of 2014 was $0.5bn, compared to $0.4bn in 2013. Full year equity income for GM China was $2.1bn, compared to $1.8bn in 2013.
GM South America (GMSA) reported EBIT adjusted of $0.1bn in the fourth quarter of 2014, compared with breakeven in 2013. Full year EBIT adjusted was a $0.2bn loss in 2014, compared with EBIT adjusted profit of $0.3bn in 2013.
GM Financial reported earnings before taxes (EBT) adjusted of $0.1bn in the fourth quarter of 2014, compared with $0.2bn in 2013. Full year EBT adjusted was $0.8bn, compared to $0.9bn in 2013.
“Our underlying business operations showed significant improvement this year,”” said GM CFO Chuck Stevens in a statement.
