In 2019 two factors had a huge impact on General Motors. The first one was the autoworkers strike and the second one relates to China. U.S. automaker experienced problems in China due to falling sales. It is important to mention that China has the world’s largest market when it comes to vehicles.
On Wednesday, General Motors released its fourth quarter and 2019 earnings. This information included many details regarding the main challenges.
In 2019, GM’s operating profit was $8.4 billion. In the last quarter of 2019, the company made $105 million. Nevertheless, 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.
As mentioned above, the company struggled to cope with problems as sales fell in China. Last year, the company lost $202 million.
Automaker’s profits in China declined 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.
Let’s have a look at the fourth-quarter results. In the last quarter of 2019, the company lost $194 million, mainly due to the 40-day autoworkers strike.
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.
However, the company was still able to surpass the earnings expectations for the fourth quarter. The revenue was slightly lower below expectations.
Adjusted earnings also surpassed the expectations. Nevertheless, revenue failed to live up to the expectations as the company’s revenue was $30.8 billion vs. $31.04 billion expected.
For the whole of 2019, shares fell by 11.7%, including a 6.1% decline in 2020. As of Thursday, the value of the automaker was $49.1 billion.
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