GM reports $9.4-bn net profit in '16, to pay 52,000 employees $12,000 each
08 Feb 2017
General Motors Co has reported record sales and record earnings for last year while its net income fell less than 3 per cent to $9.43 billion considering a one-time gain that boosted income in 2015.
But with record profits in North America and strength in China, the company posted several yearly records, including a 16-per cent increase in last year's pre-tax adjusted earnings of $12.5 billion.
The company also posted record earnings per share of $6 for the year, adjusted pre-tax margin of 7.5 per cent, revenue of $166.4 billion and North American adjusted pre-tax earnings of $12 billion. The company's revenue grew 9.2 per cent year-on-year.
It may be noted that the records come after GM emerged from bankruptcy in 2009 as a new company.
Record sales and record earnings have led to a record profit-sharing payout for 52,000 US employees of General Motors.
Eligible employees will receive up to $12,000 in profit sharing, GM said on Tuesday.
For every $1 billion the company makes in North America, hourly employees receive $1,000 in profit sharing, according to the United Auto Workers-GM agreement.
At an investors' conference during Detroit's auto show in January, General Motors executives told investors to expect improved pretax profits for 2016 and 2017, thanks to strong sales in key markets and cost cuts.
On Tuesday, the company partly delivered, reporting a 16 per cent increase in last year's pretax income.
GM, however, will find it hard to beat last year's net income of $9.4 billion in the current year with overall auto sales flattening in the US, GM's biggest market, and car inventories growing.
And, with the new President Donald Trump dashing hopes of an American free market, economic troubles lingering in Europe, GM will find it hard to beat last year's net income.
GM is banking on its large presence in China and newer products, especially in profitable trucks and SUVs that are becoming increasingly popular with US and global buyers.
Despite looming issues, GM estimates it will earn a pretax profit this year in a range from $6 to $6.50 per share.
Still, the uncertainty pushed GM's shares down $1.80, or 4.9 per cent, to $35.03 in midday trading today.