GM 1Q earnings fall 60 per cent, triggering stock slide

DETROIT — General Motors’ first-quarter net income fell 60 per cent from a year ago, and its shares fell even though the numbers beat Wall Street estimates.

The Detroit automaker says it made just over US$1 billion from January through March, or 77 cents per share. A year ago, the company made $2.6 billion, or $1.70 per share.

GM says earnings and revenue fell because shipments to dealers dropped as factories were closed to retool for new full-size pickup trucks. But sales from dealers to buyers in the U.S., GM’s most profitable market, rose 3.8 per cent driven by SUVs.

Investors were not impressed, however. Shares of GM tumbled 2.4 per cent to $37.18 in Thursday midday training.

GM had warned that earnings would be slower in the first and fourth quarters of the year, but the company said it is still on track to reach annual pre-tax earnings of around $6.50 per share.

Excluding one-time costs, such as restructuring in South Korea, the company made $1.43 per share. Analysts polled by FactSet expected $1.24. Revenue fell 3 per cent to $36.1 billion. Analysts predicted $34.5 billion.

In North America, the company made $2.2 billion before taxes for an 8 per cent profit margin. The company’s joint venture in China made a record $600 million.

GM said all of its business units were profitable for the quarter.

The company remains on track to start carrying passengers in autonomous vehicles with no human backup drivers sometime next year, CEO Mary Barra said.

GM recently updated the underpinnings of its compact and mid-size cars so it can refresh them with little capital expenditures, Barra said.

Its shipments to dealers were down by 47,000 for the quarter, largely because factories making Chevrolet Silverado and GMC Sierra pickups were shut down to retool for new fall versions.