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.
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.