General Motors delivers its 12th quarterly profit and third consecutive year strongly in the black since its 2009 bankruptcy, but a familiar theme played out as the auto maker’s turnaround at home barreled ahead while Europe sputtered.
“From every vantage point, 2012 was another solid year,” says GM Chairman and CEO Dan Akerson.
The auto maker earned $898 million, or $0.54 per share, in fourth-quarter 2012, up from $468 million, or $0.28 per share in the prior-year. Revenue grew 3.4% to $39.3 billion from $38.0 billion.
GM sold 2.33 million vehicles worldwide in the three months ending Dec. 31, compared with 2.24 million in like-2011. However, its global market share in the period slipped to 11.5% from 11.6% the year earlier.
GM closed 2012 with a full-year profit of $4.86 billion, or $2.92 per share, down sharply from $7.59 billion, or $4.58 per share, in 2011.
The auto maker cites a number of special items unfavorable to its 2012 results totaling $531 million, compared with gains of $1.16 billion in prior-year. Tax-rate changes and charges related to its European restructuring created much of the headwind.
Revenue last year increased 1.3% to $152.26 billion from $150.28 billion.
GM sold 9.29 million vehicles worldwide last year, compared with 9.02 million in 2011. Its year-end global share fell to 11.5% from 11.9%.
A struggling economy in Europe continued to dog GM’s turnaround efforts in the region, as it posted a before-tax loss of $700 million in the quarter and a $1.8 billion loss for the year. GM has lost money in Europe for more than a dozen years.
The auto maker’s sales in Europe tumbled 11% in Q4, with deliveries falling to 372,000 units from 417,000 prior-year. Full-year sales dropped 17.6% to 1.61 million units from 1.75 million. Its share in region slipped to 8.3% from 8.6% in the quarter and to 8.5% from 8.7% on the year.
GM Chief Financial Officer Dan Ammann says the auto maker sees progress in its cost- cutting and product initiatives, citing early consumer demand for the new Opel Adam B-car and Mokka small cross/utility vehicle, but warns the overall picture in Europe does not appear headed for marked improvement.
“We see the (European) industry down this year,” Ammann says during a conference call today to discuss the auto maker’s financial results. “Our view on the industry has not gotten any more bullish.
“The things in our control, we feel like we’re making good progress on,” he adds. “The great unknown, of course, is what happens in the European economies.”
Akerson reiterates GM plans to shutter its Bochum, Germany, assembly plant after the run-out of the current-generation Zafira in 2016. But he warns the auto maker’s biggest capacity reduction in the region could come earlier if a wider labor pact in the country is not reached soon.
Elsewhere in the world, GM’s motor kept humming.
In North America, share fell in the U.S., but the overall region’s before-tax profit held steady at $6.95 billion for the year on revenue of $94.6 billion.
International markets, such as China and Russia, saw earnings grow to $2.19 billion before taxes from $1.9 billion in 2011. General Motors International Operations’ revenue rose to $27.7 billion from $24.76 billion.
In South America, which just completed a refresh of its GM product portfolio, the region swung to a $271 million before-tax profit from a loss of $122 million prior-year. Revenue climbed to $17.0 billion from $16.87 billion.
In many ways, 2012 proved to be a transitional year for GM. Since its 2009 bankruptcy, the auto maker has held the line on important new-product introductions in order to build up its balance sheet. Share in the U.S. domestic market, for example, fell to an all-time low of 17.3% for the year.
But at the North American International Auto Show in Detroit last month, GM showed its new fullsize trucks, which have received a complete makeover and arguably represent its biggest product launch in years.
GM won North American Car of the Year honors for the Cadillac ATS small sports sedan, a pivotal global play for the auto maker.
In the coming year, new launches will turn GM’s product portfolio from the oldest in North America to the newest industry lineup. The auto maker’s cars and trucks will see similar turnover globally.
“Going forward, our product strategy is going to become increasingly hard for competitors to defend against,” Akerson says, promising GM’s product portfolio between 2013 and 2016 will refresh at a rate twice that of the past three years.
“This strategy was in full display at (the NAIAS). The energy around GM was infectious. In fact, Detroit might have been GM’s best auto show since its halcyon days of the 1950s.”
