DETROIT – General Motors Co said on Thursday that first-quarter profit tumbled 88 percent after a massive recall due to defective ignition switches, but results still topped expectations on strong pricing for its redesigned pickup trucks in North America.
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The quarter included a previously disclosed charge of $1.3 billion for the recall, and Chief Financial Officer Chuck Stevens said it was too early to predict whether GM would take more charges. He also said it was still studying its options for the victims of the faulty switches. The faulty switches are linked to at least 13 deaths.
Safety advocates and some lawmakers have called for GM to establish a victims compensation fund, an option being studied.
"Obviously, the recall campaign charges in the first quarter overshadows the headline results, but if you look underneath that, we had strong performance across the board," Stevens told reporters at the company's Detroit headquarters.
Some GM ignition switches can make vehicle engines stall while operating, stop airbags from deploying, and power steering and power brakes from operating. The company is under investigation by U.S. safety regulators, Congress and the U.S. Department of Justice over its failure to detect the faulty part for more than a decade.
Net income in the first quarter fell to $108 million, or 6 cents a share, from $873 million, or 58 cents a share, in the year-earlier period. The most recent quarter included recall costs of $1.3 billion, or 48 cents a share.
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Excluding a charge mostly for the devaluation of the Venezuelan currency, GM earned 29 cents a share, far better than the 4 cents analysts expected, according to a poll by Thomson Reuters I/B/E/S.
Revenue rose 1.4 percent from last year to $37.4 billion, but below the $38.4 billion that analysts expected.
GM raised prices for its vehicles, which boosted operating profits by $1.8 billion. The bulk of that increase was in North America, thanks to higher sales of more lucrative versions of its redesigned Chevrolet Silverado and GMC Sierra full-size pickup trucks. Stevens said the average transaction price for the trucks rose about $5,000 in the quarter from a year ago, and overall prices were up about $2,000 per vehicle.
(Reporting by Ben Klayman and Bernie Woodall in Detroit; Editing by Jeffrey Benkoe)