General Motors shares jumped more than 4% on Tuesday after the automaker announced better-than-expected quarterly results, driven in part by record sales of crossovers and pickup trucks in the U.S..
GM reported a net loss of $4.9 billion, or $3.46 per share, in the fourth quarter, down from a profit of $2.1 billion, or $1.36 per share, a year earlier. But the loss included a $7.3 billion charge tied to tax law changes, and a $6.2 billion charge from the sale of GM’s European brands, Opel and Vauxhall.
Excluding one-time items, the company earned $3.1 billion, or $1.65 per share, easily beating analysts’ estimates of $1.38 per share. Revenue declined 5.5% to $37.7 billion, but that was ahead of estimates of $36.55 billion.
GM reduced inventory in the quarter to meet slackening demand — at year end, U.S. inventory was down 90,000 units from 2016 — but that was offset by strong pricing and cost controls. In trading Tuesday, GM shares were up 4.2% at $41.17.
“I think the important aspect is to look at the operating results and what I would say is another very strong, and actually great, fourth quarter and a great year,” CFO Chuck Stevens said in an earnings call. “We couldn’t be more pleased about our results and the disciplined execution across all of our business units in 2017.”
In North America, fourth-quarter adjusted earnings before interest and taxes hit a record $11.9 billion, while the full-year 2017 EBIT margin was a record 10.7% — the third straight year above 10%.
As CNBC reports, GM, like rival Ford, “is focusing more of its attention on high-margin trucks and SUVs, and is funneling money into new technologies, such as autonomous vehicles. In January, the company said it is seeking federal approval for a self-driving car.”
In 2018, GM expects to benefit from sales of of its newly refreshed crossovers, the Chevrolet Traverse, Buick Enclave, and GMC Terrain, and it also plans to debut the Cadillac XT4 crossover.
CEO Mary Barra told analysts that GM expects its financial performance to “accelerate further in 2019.”