GM posts lower first quarter revenues
24 Apr 2015
US car giant General Motors has posted lower first quarter revenues, following falling demand from Brazil and Russia.
Revenues at the Detroit-based automaker came in at $35.7 billion, 4.5 per cent lower than $37.4 billion last year.
Net income in the three months to 31 March was $945 million, as against $145 million a year earlier when the results were affected by the costs of vehicle recalls.
GM said in March, it would close its Russian plant due to low demand.
In South America, in addition to lower demand from Brazil, results also took a hit from the strength of the dollar.
"Clearly the macro environment in South America, and primarily Brazil, deteriorated versus even where we thought it was going to be," said GM's chief financial officer Chuck Stevens told reporters at the company's Detroit headquarters.
However, chief executive Mary Barra remained optimistic.
"Our results in the first quarter provide a solid foundation to achieve our financial commitments for the year.
"Continued execution of our plan... will drive profitable growth, return on invested capital and shareholder value."
Stevens expects the region to remain "reasonably challenged" through the first half of the year. However, he added, GM was looking to profits in the second-half, similar to the same period last year.
He added GM had cut jobs and would reduce production shifts at plants in Brazil, generating about $200 million in annual savings. The company lost $214 million in South America in the first quarter.
Affirming GM's overall 2015 outlook for improved profit, he said it remained on track in 2016 to hit 10 per cent profit margins in North America and return to profitability in Europe.
Dismissing reports of a possible merger, Barra said the company would focus on its own operations. "We're not going to entertain anything that distracts us from accomplishing that," she said.
Fiat Chrysler CEO Sergio Marchionne had been interested in a deal with GM.
GM earned $2.18 billion in North America, and reported profit margins of 8.8 per cent thanks to robust demand for large pickups and SUVs, and lower costs.