GM rises as profit tops analysts’ estimates
DETROIT • General Motors Co. shares rallied Wednesday after the automaker reported fourth-quarter profit that beat analysts’ estimates as cheaper gasoline helped vehicle sales, especially of its more-lucrative light trucks.
Adjusted earnings per share jumped to US$1.19, topping the average analyst estimate for US83¢, from US67¢ a year earlier, the largest U.S. automaker said in a statement. GM’s North American unit posted its sixth straight quarter of improved profit margins, resulting in profit-sharing cheques for union workers of as much as US$9,000. GM’s stock added 5.4% to close at US$35.83.
Analysts were projecting stronger results after the company signalled at a conference last month that results from Mary Barra’s first full year as chief executive would be better than the company had anticipated. Low interest rates and gasoline prices that have tumbled more than 40% since April continue to push auto sales up, and GM’s profits have followed.
“A strong fourth quarter helped us deliver very good core operating results in 2014 despite significant challenges we and the industry faced,” Ms. Barra said in the statement.
GM will consider returning more cash to shareholders later this year, on top of a planned 20% dividend increase announced Wednesday, the company’s chief financial officer, Chuck Stevens, told Reuters.
The company said sales were US$39.6 billion, compared with the average analyst forecast of US$40.3 billion and US$40.5 billion in the fourth quarter of last year.
Sales of GM’s Chevrolet Silverado rose 10% last year, gaining ground on Ford Motor Co.’s F-Series truck line, which lost production as the Dearborn, Michigan-based automaker retooled factories to convert to an aluminum-bodied version of its F-150.
GM’s pickup was redesigned a couple of years ago and was named North American Truck of the Year at the 2014 Detroit auto show.
GM’s results were announced just hours after Toyota Motor Corp., the world’s largest automaker, beat analyst estimates for quarterly profits and raised its fiscal-year forecast to record 2.13 trillion yen in part because the yen has weakened against the dollar.
Expenses for its ignition- switch recall should be taken care of after booking US$2.8 billion in charges for 2014, chief financial officer Chuck Stevens said last month in a presentation to journalists.
GM recalled 2.59 million vehicles after the ignition switch failed. So far, 51 deaths have been linked to the failed switch.