General Motors is a world-famous automaker thanks to its vehicles. Recently, GM released the fourth-quarter results. Based on the information, the automaker lost $194 million in the fourth quarter of 2019 due to 40-day autoworkers strike.
This strike had a huge impact on General Motors as the automaker was losing money due to the situation. The strike cost the automaker $2.6 billion in earnings before interest and taxes during the quarter. Overall, the company lost $3.6 billion in 2019.
Nevertheless, the company was still able to surpass the earnings expectations for the fourth quarter. The revenue was slightly lower below expectations.
Let’s have a look at GM stocks. The stock added 2.6% in premarket trading to reach more than $35 a share. For the whole of 2019, shares fell by 11.7% including a 6.1% decline in 2020. Currently, the value of the automaker is $49.1 billion.
Adjusted earnings also surpassed the expectations. However, revenue failed to live up to the expectations as the company’s revenue was $30.8 billion vs. $31.04 billion expected.
General Motors and main challenges
GM’s operating profit for 2019, reached $8.4 billion. In the last quarter of 2019, the company made $105 million. However, in 2018 the operating profit was higher and stood at $11.8 billion.
In North America, the company earned $8.2 billion including $263 million in the fourth quarter. Nevertheless, in 2018 General Motors earned $10.8 billion.
The company experienced problems on the international stage. In 2019, the company lost $202 million due to problems in China. GM’s profits in China fell from $2 billion in 2018 to $1.1 billion in 2019. In the fourth quarter, sales declined by $68 million to $239 million.
Nevertheless, GM remains optimistic about the long-term Chinese market despite the slowing sales and competition.
Last but not least, the automaker’s 2020 guidance was flat compared to last year. It includes adjusted earnings of $5.75 to $6.25 per share as well as adjusted operating cash flow from $13 billion to $14.5 billion. According to the information, the adjusted automotive free cash flow is expected to range from $6 billion to $7.5 billion.