General Motors (GM) on Wednesday swung to a quarterly profit thanks to high-margin trucks and crossovers in the United States market plus cost cutting and maintained its full-year 2019 earnings forecast, lifting its shares 1.5% in early trading.
The Detroit automaker, which made $11.8 billion last year, announced profit-sharing as part of its full-year 2018 earnings report.
Profit in North America rose 5.8 percent to $3 billion, while GM's global operations lost $48 million. Daimler pays out in April but GM employees are scheduled to receive the payment in their 22 February paycheck. But it still played out well for profit-sharing checks, with about 46,500 union workers in the U.S. They will take home $10,750 each, less than last year's $11,500.
General Motors posted an $8.1 billion net profit in fourth-quarter earnings thanks to high-end pickup and crossover sales in its North American market, according to Reuters. This week, GM started telling 4,300 other salaried workers that they were out of a job.
Barra also cited the company's efforts to shift numerous affected hourly workers to other plants, lessening the impact of the cuts among blue-collar workers.
GM wanted to cut 8,000 white-collar workers. The company's revenue was up 1.8% compared to the same quarter previous year. GM's U.S. market share 0.4 percentage points to 16.7 per cent.
Buckingham Research set a $34.00 price target on General Motors (NYSE:GM) (TSE:GMM.U) in a report published on Friday, January 11th. The auto manufacturer reported $1.43 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.21 by $0.22.
Chief Financial Officer Dhivya Suryadevara said GM said it made $2 billion on its joint venture in China last quarter, despite slowing auto sales in the country. Losses at the GM Cruise self-driving-car unit widened to $728 million last year and will probably cost the automaker $1 billion this year. Suryadevara expects another $1 billion increase this year.
"GM delivered another strong year of earnings in a highly volatile environment in 2018", Chief Executive Mary Barra said in a statement.
GM has managed to offset some costs with efficiencies, she told reporters Wednesday.
China was a weak spot in the final three months of last year, however, with operating profit in the country falling by almost 40 per cent compared with a year earlier. US Representative, Dan Kildee, wants GM Q4 profits to be reinvested in his native US state of MI to save more employees. Its income from the region fell to US$307 million in the quarter from $504 million a year earlier.
GM thinks that it will outpace last year's performance in 2019. The business had revenue of $38.40 billion during the quarter, compared to the consensus estimate of $36.31 billion. General Motors Company (NYSE:GM)'s price to sales ratio for trailing twelve month stands at 0.37, whereas its price to book ratio for the most recent quarters is at 1.46.