General Motors CEO Mary Barra
Bill Pugliano | Getty Images
DETROIT – General Motors lost $194 million in the fourth-quarter heavily due a 40-day labor strike against the company that cost it four weeks of vehicle production and eroded any profit.
The strike, according to the automaker, cost it $2.6 billion in earnings before interest and taxes during the three months ended Dec. 31, shaving $1.39 per share off of its EPS on an adjusted basis. The impact for the year was $3.6 billion.
The company still beat Wall Street’s earnings expectations for the fourth quarter, but its revenue came in slightly below expectations.
Here’s what GM reported on Wednesday compared to what Wall Street expected, according to Refinitiv consensus estimates:
- Adjusted earnings: 5 cents per share compared to 1 cent per share expected.
- Revenue: $30.8 billion compared to $31.04 billion expected.
GM’s operating profit remained healthy. The company reported an operating profit, which is earnings before interest and taxes, of $8.4 billion for the year, including $105 million in the fourth-quarter. That’s down from $11.8 billion compared to 2018 and $8.4 billion for the fourth-quarter of that year.
The company’s 2020 guidance includes adjusted earnings of $5.75 per share to $6.25 per share and adjusted operating cash flow of $13 billion to $14.5 billion.
Wall Street’s attention is expected to be on the Detroit automaker’s operations in China, which experienced a 15% sales decline last year, as well as the company’s 2020 outlook amid growing challenges in North America and China.
GM reported its fourth-quarter and 2019 earnings ahead of an investor day from 10 a.m.-2 p.m. Wednesday from the New York Stock Exchange. GM executives, including CEO Mary Barra, will discuss the company’s operations and outlook at-length as it pivots toward all-electric vehicles, including at least 20 new EVs globally by 2023.
GM’s earnings come a week after the automaker confirmed plans to resurrect Hummer, best known as a gas-guzzling, military-style SUV, as an all-electric “super truck” with massive horsepower, acceleration, and torque.