Shares of General Motors (NYSE:GM) are sliding in pre-market trading despite bringing a net income of $3.8 billion, which fell short of some rosy analyst estimates. While GM North America saw an EBIT-adjusted figure of $1.9 billion for the quarter, Europe fell at a loss, and South America stayed flat.
While operating performance improved during the year, GM noted that it was “more than offset” by net losses from special items and incremental tax expenses. Revenues for the year grew by 2 percent, at $155.4 billion in comparison to the $152.3 billion from 2012.
“Launches of some of the best vehicles in our history combined with significant improvements in our core business led to a solid year,” CEO Mary Barra said in GM’s statement. “The tough decisions made during the year will further strengthen our operations. We’re now in execution mode and our sole focus will be on delivering results on a global basis.”
Fourth-quarter revenue of $40.5 billion put a 3 percent gain on 2012′s figures after taking into a consideration of a $700 million charge related to pulling the Chevrolet brand from Europe.
During the period, however, GM was busy catching up on its pension obligations, an enormous expense for American automakers and a substantial risk to their bottom lines. GM’s year-end global pension obligations of $99 billion were roughly 80 percent funded at the end of the year, with its underfunded position at $19.9 billion — considerably improved from the $27.8 billion that it sat at at the end of 2012.
“In 2013, we strengthened our fortress balance sheet and delivered consistent earnings, providing the foundation for a quarterly dividend for our shareholders this year,” said Chuck Stevens, who is the GM executive vice president and chief financial officer. “This year, we’ll leverage our strength in the U.S. and China to execute important restructuring activities in other key global operations.”
However, under the current economic conditions, GM isn’t expecting mandatory contributions to U.S.-defined benefit pension plans for at least five years, and “while the company will continue to evaluate opportunities to make voluntary cash contributions,” it isn’t planning to do so in 2014.