General Motors headquarters is seen in the Renaissance Center in Detroit.
(Photo: Stan Honda / Getty Images)
General Motors Co. reported Tuesday a loss of $3.9 billion in 2017, due largely to charges related to the new tax law and the Opel-Vauxhall sale, in what the company characterized as a very strong year.
Even though GM’s continuing operations — that part of the company outside of its money-losing European Opel-Vauxhall business — made $300 million last year, that was down 96 percent from 2016. GM’s pre-tax profits totaled $12.8 billion, matching its record in 2016.
The Detroit automaker’s earnings-per-share also reached a record $6.62. GM said last month it expected earnings-per-share of $6.50.
GM characterized 2017 as a year of transformation, and Chief Financial Officer Chuck Stevens said the company is very satisfied with its performance last year.
He focused on the automaker’s operations outside of Europe, which made $300 million on $145.6 billion in revenue for the year. In the fourth quarter, those operations lost $4.9 billion on $37.7 billion in revenue. That loss is related to a non-cash $7.3 billion write-down of its tax assets in the fourth quarter of 2017.
“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,” he said. “We couldn’t be more pleased about our results and the disciplined execution across all of our business units in 2017.”
GM took a $6.2 billion hit on the year in its sale of Opel-Vauxhall to PSA Groupe SA, bringing down the year-end result. But the automaker in 2016 lost $257 million pre-tax in Europe, still an improvement from its $813 million pre-tax loss in the region in 2015. The automaker has said it is counting on strength in North America and China — and “improvement in South America” — to drive its performance in 2018.
Stevens said GM’s South American business was profitable in the fourth quarter — the second straight profitable quarter — and posted a $400 million year-over-year improvement.
GM’s adjusted earnings before interest and taxes in North America totaled $11.9 billion, down from $12.4 in 2016. China joint ventures and other international operations made $1.3 billion in 2017.
The automaker also announced profit-sharing of up to $11,750 for its roughly 50,000 United Auto Worker hourly employees, compared to the $12,000 checks distributed last year.
In 2016, GM made $9.43 billion in net income, record earnings-per-share of $6 and adjusted pre-tax earnings of $12 billion.
In the fourth quarter, GM reported a net loss of $5.1 billion. As GM prepares for a new corporate tax rate in the GOP tax bill, the company took a non-cash $7.3 billion write-down of its tax assets in the fourth quarter of 2017.
“With a fortress balance sheet, successful product pipeline and well-articulated strategic vision for the future of the automotive industry and mobility in general, investors can see real value in GM, beyond a nice dividend,” David Kudla, a financial analyst with Mainstay Capital Management, said in a statement.
Ford Motor Co. reported a 65 percent increase in annual profit last year, but the automaker’s pre-tax profit dropped $1.9 billion from a year ago to $8.4 billion. Fiat Chrysler Automobiles NV’s net profit nearly doubled in 2017 to $4.35 billion (3.5 billion euros).
Detroit News auto reporter Ian Thibodeau contributed
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