logo-loader
viewGeneral Motors Company

General Motors and Ford run out of gas, post disappointing 4Q results

GM saw its operating profit drop precipitously by more than 95% to $105 million, while Ford's net loss deepened to $1.7 billion over the fourth quarter

General Motors Company    -
Going forward, Ford forecasts that its 2020 earnings will fall in the range of $0.94 to $1.20 per share

General Motors (NYSE:GM) took a massive hit in the fourth quarter as a prolonged union strike which closed factories across the US exacted a toll on its ability to turn a profit.

In the three months until December, the Detroit auto maker saw its operating profit drop precipitously by more than 95% to $105 million as a result of worker protests, which were triggered by their failure to reach a labor agreement last year.

READ: Coronavirus boosts US dollar status as safe haven, to the slight detriment of gold

The company’s net income, meanwhile, slid to a loss of $194 million, from a profit of $2 billion in the same period a year earlier, while its revenue dropped 20% to $30.8 billion.

Adjusted earnings came in at 0.05 per share, which exceeded the forecast of a penny which analysts expected.

Looking ahead, GM expects profits to flatline this year, with earnings per share expected to fall in the range of $5.75 to $6.25 excluding items, which meets analysts’ projection of $6.23.

In response to the news, investors were unfazed and GM shares dipped only slightly by 0.26% to $34.28.

GM rival Ford fared even worse on Wall Street as the auto maker’s shares took a 9.9% plunge to $8.28 after it posted a diminished forecast for 2020.

In the fourth quarter, Ford’s net loss deepened to $1.7 billion, or $0.42 per share, from a loss of $100 million or $0.03 per share in the same period a year earlier. Its revenue also fell to almost $40 billion, which was more than the $36.5 billion expected by analysts. The results took into account a deficit of more than $2 billion which sprung from employee pension contributions.

Going forward, Ford forecasts that its 2020 earnings will fall in the range of $0.94 to $1.20 per share, which falls below the $1.26 expected by analysts.

Quick facts: General Motors Company

Price: 27.79 USD

NYSE:GM
Market: NYSE
Market Cap: $39.77 billion
Follow

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

FOR OUR FULL DISCLAIMER CLICK HERE

Watch

Full interview: Fax Capital CEO talks investment and aligning with the right...

Fax Capital (TSE: FXC-) CEO Blair Driscoll joined Steve Darling from Proactive Vancouver to discuss the investment holding company that intends to invest in approximately 10 to 15 high-quality small-cap public and private businesses located primarily in Canada. Driscoll tells Proactive why...

15 hours, 19 minutes ago

2 min read