Pricey Pickups Power GM Earnings in Q4

Sierra pickup left and Denali in Detroit. General Motors' posted an $8.1 billion net profit last year as it got better prices for vehicles sold in the U.S. its most lucrative market

General Motors (GM) on Wednesday swung to a quarterly profit thanks to high-margin trucks and crossovers in the USA market plus cost cutting and maintained its full-year 2019 earnings forecast, lifting its shares 1.5% in early trading.

Profit in North America rose 5.8 percent to $3 billion, while GM's worldwide operations lost $48 million.

Eligible employees will receive their share in their February 22nd paycheck. But it still played out well for profit-sharing checks, with about 46,500 union workers in the U.S. They will take home $10,750 each, less than last year's $11,500.

"The UAW Membership makes the components for and builds the finest General Motors cars, trucks, crossovers, SUVs and vans in the world right here in the U.S.A.", UAW vice president and director of the GM department Terry Dittes said in a statement.

General Motors will pay more than 46,000 eligible USA hourly employees up to $10,750 in profit sharing this year.

GM workers get the bonus sooner, too.

GM said Monday it was starting to cut about 4,000 salaried workers in the latest round of restructuring announced in November.

According to the press release, US hourly workers have earned more than $80,500 in profit sharing payments, and the company says it's time to spread the wealth. The firm's quarterly revenue was up 1.8% on a year-over-year basis.

Total North America vehicle sales dipped 4.2% to 917,000 but GM's bottom line was boosted by pickup truck sales, which are a profitable and growing share of its product lineup.

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GM made $2 billion, or $1.40 per share in the fourth quarter.

"Our outlook for China overall is for the auto industry to be flat year over year", CFO Dhivya Suryadevara said.

The Trump administration's tariffs on imported aluminum and steel raised prices of those commodities, costing the company more than $1 billion past year.

Meanwhile, GM Financial generated 2018 full-year earnings before tax of 1.9 billion dollars, up 58.3 percent compared with 2017.

"It's a volatile environment as you well know, and we're going to have to see how that goes", she said.

GM has invested more than $22 billion in its plants since 2009, including more than $600 million in 2018. GM is cutting costs, reining in production and pushing sales of Cadillac to offset the declines at its mainstream brands, Buick and Chevrolet.

New vehicle sales in the United States are widely expected to decrease during the current year as a result of higher interest rates and competition from a superfluity of less expensive, nearly-new used vehicles on the market.

GM thinks that it will outpace last year's performance in 2019. The firm had revenue of $38.40 billion during the quarter, compared to analysts' expectations of $36.31 billion.

"We are very concerned about GM's worsening vehicle sales trends ... and the company's exposure to a slowing China market, which we think could challenge the company's ability to hit their full-year earnings guidance", he added.

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