GM logs 27% jump in pretax profit in 4th quarter 2014

Article by Christian A., on February 9, 2015

General Motors posted a 27-percent jump in fourth-quarter pretax profit to $2.41 billion, despite failing to trim its losses in Europe hit by the current Russian crisis. Fourth-quarter revenue, however, dropped 2.1 percent to $39.62 billion. GM saw its losses in Europe surged to $393 million in the fourth quarter of 2014 from $365 million in the same period in 2013.

They were practically offset by stronger pricing across major markets as well as high demand for pickups and SUVs in North America. GM Chief Financial Officer Chuck Stevens said its losses in Europe were mostly due to the current economic crisis in Russia, where a depreciating ruble has caused consumers to delay or put off making large purchases like vehicles.

He said that for this year, Russia will continue to “be a headwind." Stephens remarked that the carmaker has taken and will continue to take aggressive action to mitigate those issues. For instance, GM has already laid off workers in Russia and is planning to stop operations at its St. Petersburg assembly site for nearly two months.

GM has also adjusted prices of its offerings in Russia to offset the current devaluation. For the full year 2014, GM's in Europe jumped to $1.37 billion from $899 million in 2013. Despite that, Stevens reiterated the carmaker’s target to returning its European operations to a pretax profit next year.

In December 2014, Karl-Thomas Neumann, chief of GM’s European and Opel operations, warned that its 2016 profit target could suffer from economic setbacks.

The fourth quarter pretax profit excludes around $900 million in special charges, mostly related to the redemption of outstanding preferred shares. Once the charges are accounted, net income for the period surged 21 percent to $1.11 billion.

For the full year 2014, the carmaker saw its net income fall 26 percent to $2.8 billion, no thanks to around $2.8 billion in expenses related to 84 safety recalls that covered about 30 million vehicles. It also saw its adjusted pretax profit drop 24 percent for the year to $6.49 billion.

If you liked the article, share on:

Topics: gm, profit

Comments

Recommended

Czech carmaker is making fans of its CNG-powered (compressed natural gas) Skoda fall in love all over again by making the latest iteration of the Octavia G-TEC more powerful and...
by - September 24, 2018
Volkswagen’s hot hatch just got hotter for the 2019 model year with the introduction of a Rabbit Edition. The new 2019 VW Golf GTI Rabbit Edition is a special model...
by - September 24, 2018
If you’re planning to buy a new Porsche unit powered by a diesel engine, better do it as soon as possible. This is because the German sports car maker has...
by - September 24, 2018
If you are one of those lucky enough to place an order for a final production version of the Mercedes-AMG Project One, here is a good development: Mercedes-Benz’s high-performance arm...
by - September 21, 2018
After months of previewing the e-tron all-electric sports utility vehicle through prototypes wrapped in bright orange and black camouflage, Audi has finally unveiled the final production version of the SUV...
by - September 20, 2018