General Motors' fourth quarter profit badly misses Wall Street expectations

Automaker reported a slight increase in quarterly profits but performed poorly in its international operations

General Motors on Thursday reported a modest increase in quarterly profits, but badly missed analyst expectations on weak performance in its international operations. Photograph: Stan Honda/AFP/Getty Images

General Motors' fourth-quarter profit rose 2% from a year ago, but the company fell short of Wall Street expectations as it spent heavily to restructure outside the US.

GM rode record North American earnings to a profit of $913m, or 57 cents per share. That compares with $892m, or 54 cents per share, a year ago. Revenue rose 3% to $40.5bn.

Excluding one-time items, including a $700m charge to exit the Chevrolet brand in Europe, GM made 67 cents per share. But analysts polled by FactSet expected 88 cents on revenue of $40.8 billion.

New CEO Mary Barra said GM's restructuring actions will strengthen the company for the future. New chief financial officer Chuck Stevens said Wall Street analysts "didn't comprehend that restructuring". Much of the restructuring costs were for employee severance expenses.

For the full year, GM's earnings fell 22% to $3.8 bn or $2.38 per share. Without one-time items, including $800m in impairment charges, it earned $3.18 per share.

GM also announced that 48,500 US hourly workers will get up to $7,500 in profit-sharing checks.

Shares fell 4% to $33.83 in premarket trading.

In North America, GM made $1.9bn in the quarter before taxes and a record $7.5bn pretax for the full year. Stevens said the company's four brands gained market share in retail sales to individual customers, and its transaction prices rose. The company recently has lost pickup truck sales to competitors Ford and Chrysler, which have raised discounts. But Stevens said GM will stick with its approach of selling cars and trucks on value rather than price.

"What we want is profitable growth," he said.

In Europe, the world's second-largest automaker lost $800m for the full year, but that was less than half of the $1.9bn it lost in 2012. GM lost $300m in the struggling region in the fourth quarter, compared with an $800m loss in 2012.

But outside North America and Europe, GM's results were weaker than a year ago.

GM earned $1.2bn in its international operations, which include Asia, for the full year, down by more than half from $2.5bn the prior year. GM's international operations earned $200m in the fourth quarter, down from $700m in 2012.

GM's operating profits also fell in South America, where it earned $300m for the full year, down from $500m in 2012. Fourth quarter earnings were flat, compared with a $100m profit in 2012.