Published: Fri, February 08, 2019
Money | By Ralph Mccoy

General Motors Q4 results: shares up after beating earnings revenue estimates

General Motors Q4 results: shares up after beating earnings revenue estimates

Late last month, rival Ford Motor Co posted a lower fourth-quarter profit as losses in every region except North America weighed on results.

It's money in years past that was looked upon as a potential stimulus to the local economy, but no so much anymore as local employees brace for the plant's idling in March.

According to Detroit Free Press, General Motors announced on Monday, Feb. 4, that it already started to cut workers and this process will continue in two weeks until all the affected workers have left.

All of the No. 1 USA automaker's profit came from North America, where those lucrative models helped overcome an overall drop in the number of vehicles it sold.

The company plans to eliminate about 6,000 factory worker jobs by closing three auto assembly plants and two other factories.

Now, to compensate the affected workers, GM's spokesman further revealed that they will be given severance pay packages and the company will offer job placement services as well.

The last day for workers at the Lordstown facility, where the Chevrolet Cruze is produced, is March 8. During the same quarter a year ago, the company posted $1.65 earnings per share. Excluding restructuring charges, the company made $1.43, beating Wall Street estimates of $1.24. Despite this, GM shares were up 1.27 percent as of 11:30 a.m. ET. The business had revenue of $38.40 billion during the quarter, compared to the consensus estimate of $36.31 billion.

Profit in North America rose 5.8 percent to $3 billion, while GM's global operations lost $48 million.

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In the U.S., GM delivered almost 3m vehicles, helped by crossover sales that topped 1m for the year.

The Trump administration's tariffs on imported aluminium and steel raised prices of those commodities, costing the company more than US$1 billion a year ago. On average, analysts expect that General Motors will post 6.3 earnings per share for the current year.

GM has managed to offset some costs with efficiencies, she told reporters Wednesday. Its income from the region fell to US$307 million in the quarter from $504 million a year earlier. On the whole, the company's goal is to get rid of at least 15 percent of its workforce which is equivalent to 8,000 people.

GM said on Wednesday that China's $300 million in operating earnings in the fourth quarter was offset by other global markets. Chief Executive Officer Mary Barra moved in November to eliminate 14,000 jobs and potentially shut seven plants worldwide.

GM thinks that it will outpace last year's performance in 2019. Adjusted cash flow is projected to be between $4.5 billion-$6 billion.

General Motors Co said on Wednesday that its fourth-quarter operating profit dropped 8 percent, as strong sales in its U.S. market were offset by a 25 percent drop in China sales. GM is also going to focus more on pickups and crossovers, models that are between SUVs and normal hatchbacks.

But GM is up against an industrywide malaise as auto sales plateau in the USA and fall in China.

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