General Motors on Wednesday reported better-than-expected earnings for the fourth quarter, results that will draw a stark comparison to Ford Motor Co., which is struggling to grow profits after several quarters of declines.
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Still, weak spots in the report show GM is not immune to the struggles that are affecting carmakers around the world. International sales dipped from the prior year, underscored by a 21.7 percent decline in Asia to 1.1 million vehicles. U.S. sales also slid slightly in the three months through December, but adjusted earnings for North America inched up year-over-year -- supported by a record average $36,000 transaction price in America.
Revenue at the Detroit-based company grew 1.8 percent to $38.4 billion, above analysts expectations. Adjusted profits were $2.8 billion, or $1.43 per share, down from the prior year but exceeding Wall Street predictions.
“GM delivered another strong year of earnings in a highly volatile environment in 2018. We will continue to make bold decisions to lead the transformation of this industry and drive signifcant shareholder value," CEO Mary Barra said.
Carmakers globally are reeling from slowing economic slowdown in China -- leading to fewer car sales in the world's most lucrative market -- and higher raw material costs due to President Trump's tariffs on steel and alumnium tariffs. GM's cost of sales in 2018, a key indicator of the impact of the new duties, rose to $120 million.
The company is in the midst of laying off 15,000 workers and ending production at several North American plants amid a shift in focus to SUVs and electric vehicles, away from sedans and passenger cars powered by petroleum. The decision sparked congressional backlash, forcing Barra to defend the choice on Capitol Hill.
|GM||GENERAL MOTORS COMPANY||36.70||+0.56||+1.55%|
|F||FORD MOTOR COMPANY||10.10||+0.05||+0.50%|
|FCAU||FIAT CHRYSLER AUTOMOBILES N.V.||13.50||+0.11||+0.82%|
GM on Tuesday released a new, heavy duty Chevy Silverado. The announcement came hours after Ford announced its own update to its F-Series Super Duty. The two Detroit carmakers, along with Fiat Chrysler, are all angling to capitalize on the booming pickup market, as sales on other models slip. Chrysler also has a new Ram Heavy Duty shipping out later this year.
GM's market share in trucks fell to 25.4 percent in fiscal year 2018.
GM Cruise, the carmaker's autonomous driving arm, lost $194 million in the quarter. The company is hoping to launch a commercial self-driving fleet this year.