General Motors fourth-quarter profit drops due to currency losses; stock slumps

general-motors

General Motors Co. (GM) reported that its fourth quarter net income fell partly because of the strength of the dollar against the sterling and forecast flat 2017 profit per share. As a result, the company’s shares plummeted by nearly 5 percent.

The drop in stock also mirrored the anxiety over rising inventories of unsold vehicles in the United States.

According to analysts, GM probably won’t be able to deliver significant growth in 2017 after two years of record profits regardless of its investments in new technology such as automated vehicles, and new SUVs and trucks.

GM’s rival automaker’s shares also fell. These companies are Ford Motor Co. and Fiat Chrysler Automobiles.

GM’s fourth-quarter net income went down to $1.8 billion, or $1.19 per share compared to last year’s net income $6.3 billion or $3.92 per share.

Exceeding the expectations of analysts last quarter of $1.17 per share, General Motors secured $1.28 per share excluding one-time items.

Based on GM’s North American adjusted profit, the company’s 52,000 hourly us workers represented by the United Auto Workers union will get a yearly bonus of $12,000, a thousand dollars more compared to last year’s bonus.

General Motors completed a share repurchase authorization of $5 billion in 2016 and will finish another one this year at $billion. GM Chief Financial Officer Chuck Stevens said in a conference that a third buyback program of $5 billion announced last month “will be completed as expeditiously as possible.”

The shares of General Motors went down $1.75 to $35.07.

FAQs

Leave a Reply

Your email address will not be published. Required fields are marked *