Despite the surging North American car market — which propelled Ford (NYSE:F) to its best quarter in more than a decade — General Motors (NYSE:GM) made less money in the first quarter than it did last year.
The Detroit automaker announced Thursday that first-quarter net income declined 14 percent to $865 million from the year-ago quarter. Excluding certain items, the company posted earnings per share of 67 cents, down from the 93 cents per share reported a year ago. Revenue also dropped, declining from the $37.76 billion reported a year ago to $36.9 billion. However, GM did beat expectations in terms of both top-line and bottom-line growth. Analysts polled by Thompson Reuters predicted the automaker to report earnings excluding items of 54 cents per share on a revenue of $36.6 billion. The company’s better-than-expected results were propelled by its North American business and a smaller-than-anticipated loss in Europe.
Although GM’s results were better than expected, the company’s earnings revealed some weakness. Global revenue dropped 2 percent during the quarter despite a strong attempt to introduce new models in both the the United States and Europe. Particular evidence of the automaker’s struggles can be seen in the results of its core North American operations, where it generated a pretax profit of $1.4 billion — a 14 percent decline from the same period a year ago.
Comparatively, Ford — another of the Big Three Automakers — experienced a 15 percent increase in first quarter-profit in its North American division. The comparison of earnings between Ford and GM also shows that GM trailed its rival significantly on profits earned per vehicle sold in the United States.
GM has struggled to rebuild its business since the recession forced the automaker to ask for a $49.5 billion government bailout to survive. In the intervening years, the company has discontinued several brands and cut thousands of jobs to keep costs in line with production and sales. Daniel F. Akerson — GM’s chief executive officer — said in the earnings press release that the drop in earnings and revenue did not reflect the improvements the company has made in its business and in the marketplace. “The year is off to a strong start as we increased our global share with strong new products that are attracting customers around the world,” he said.
Last year, GM lost market share in the United States to rivals like Toyota (NYSE:TM) and Chrysler. However, Akerson asserted that this year GM would reverse that trend with new vehicles like the redesigned Cadillac ATS sedan and new pickup trucks. In the first four months of 2013, GM sold 902,000 vehicles in the United States – a 10 percent increase from the first four months of 2012. In comparison, sales for the overall industry have improved approximately 7 percent.