Listen to this article
Post-election US consumer confidence helped General Motors beat the market expectations for its fourth quarter results but Brexit related foreign currency losses meant the automaker missed its goal of recording a profit in Europe.
For the three months to end of December, net income came it at $1.8bn, or 71 per cent below the year earlier figure, due to foreign currency factors and a one time tax gain in the year earlier period.
Adjusted for this, earnings per share was $1.28 per share, well above market expectations of $1.17 per share,
Chuck Stevens, GM’s chief financial officer, told journalists the company is reiterating its forecast for 2017 earnings, made last month, of $6 to $6.50 per share. Full year 2016 earnings per share of $6 were at the upper end of the range previously forecast by the company.
“We expect 2017 to be another very strong year,” he said.
He put a figure on Brexit-related losses in 2016 of $300m and forecast a further $300m hit for this year, mainly currency related. “Absent Brexit we would have broken even in Europe,” he told reporters on a conference call, adding “we expect flattish performance in Europe in 2017 vs 2016”. The company reported a European loss of $300m for 2016, compared with $800m in 2015.
GM reported fourth quarter global net revenues of $43.9bn, up 10.8 per cent on the year earlier period, above market expectations.
Last week GM reported a slow start to US vehicle sales for this year with sales down 3.8 per cent in January year on year, after an unexpectedly strong December.
GM shares rose 1.7 per cent in pre-market trading.