GM turns a $2.8B profit in 2014

Ontario sells its remaining stake in company for $1.1B

DETROIT— If it weren’t for the recalls, 2014 would have been a stellar year for General Motors.

Even with $2.8 billion (U.S.) in pretax costs to fix more than 30 million recalled vehicles and $400 million set aside for death and injury claims, GM still managed to turn a $2.8billion profit. That’s because otherwise, most of the stars lined up well for the Detroit automaker. Gas prices fell, the U.S. economy gained steam and cheap credit was abundant.

Combined, they sent buyers to GM’s newly redesigned and lucrative pickup trucks and large SUVs in North America, the company’s most profitable market. At the same time, chief competitor Ford’s truck plants were down much of the year while it switched to a new pickup with a risky aluminum body. Sales in China grew faster than the market. Worldwide sales were up 2 per cent to 9.9 million vehicles, a record.

Things were so good, GM decided to increase its dividend next quarter by 20 per cent, to 36 cents, pending board approval. There was trouble in Europe, Russia and Latin America, but by and large, GM had a good year.

After markets closed, the Ontario government announced that it sold its remaining shares in General Motors, earning $1.1 billion in proceeds.

The company’s full-year earnings amounted to $1.65 per share. Net income was down 26 per cent from $3.8 billion in 2013. But excluding one-time items, GM made $3.05, beating Wall Street’s expectation of $2.64, according to FactSet. Revenue rose to $155.9 billion, beating the analysts’ prediction of $150.6 billion.

“We’re really going to carry the positive momentum into 2015,” chief financial officer Chuck Stevens said. “We expect both aggregate earnings and profit margins to improve in all of our automotive regions.”

In the fourth quarter, GM reported net profit of $1.1 billion, or 66 cents per share. That’s 21 per cent better than a year ago. Excluding $300 million of negative one-time items, GM made $1.19 per share.