The company said improved operating results were more than offset by a net loss from “special items and incremental tax expense.”
GM North America President Mark Reuss, left, and Gov. Rick Snyder, right, both look on as they listen to Flint Assembly Plant manager Amy Farmer speak to hundreds on Monday, Dec. 16, 2013 at the Flint Assembly Plant moments before the announcement that General Motors is investing nearly $1.3 billion into five manufacturing sites in three states including Michigan, of which $600 million will be put into Flint Assembly for facility upgrades and a new paint shop. Jake May | MLive.comDETROIT, MI - General Motors’ net income fell 22 percent to $3.8 billion in 2013, down from $4.9 billion in 2012.
In announcing its 2013 financial performance Thursday, the company said improved operating results were more than offset by a net loss from “special items and incremental tax expense.”
Special items had a $1.3 billion impact on GM’s bottom line in 2013, whereas the same expenses cost the company just $0.5 billion in the year before. The company said the special expenses included cost involved with strategic decisions to improve the company’s future competitiveness in key global markets.
An incremental tax expense added another $1.7 billion to costs.
GM’s revenues were up 2 percent to $155.4 billion in 2013. Its full year earnings before interest and tax (EBIT) was $8.6 million, compared with $7.9 billion in 2012.
GM’s net income for the fourth quarter of 2013 was flat at $900 million. The automaker’s EBIT was up to $1.9 billion, compared with $1.2 billion in the same period of 2012. Revenues increased 3 percent to $40.5 billion in the quarter.
The company’s stock was down more than 4 percent, trading at $33.75 a share before markets opened on Thursday morning.
A conference call with investors and analysts is scheduled for 10 a.m.
“Launches of some of the best vehicles in our history combined with significant improvements in our core business led to a solid year,” GM CEO Mary Barra said in a statement. “The tough decisions made during the year will further strengthen our operations. We’re now in execution mode and our sole focus will be on delivering results on a global basis.”
In North America, GM’s earnings before taxes in the fourth quarter grew to $7.5 billion, compared with $6.5 billion in 2012. That means the company will pay profit sharing of up to $7,500 to some 48,500 eligible GM hourly workers in the U.S.
GM narrowed its losses in Europe, reporting a $300 million pre-tax loss in the fourth quarter, compared with an $800 million loss in the same period of 2012. For the full year, its EBIT there was a loss of $800 million, compared to a $1.9 billion loss in 2012.
Despite results that were below expectations, Karl Brauer, a senior analyst with Kelley Blue Book, said the automaker’s full-year and fourth quarter performance show that the company is stabilizing.
“The automaker's fourth quarter performance reflects its steady growth, which looks to continue in 2014,” Brauer said. “GM wants to maintain transaction prices and profitability going forward, which means limiting incentive spending. This is a worthy goal, though it gives competitors an opportunity to capture sales and market share, something we saw with the all new Silverado in the fourth quarter and something GM will have to balance carefully going forward.“