Feb. 6 - General Motors profits missed forecasts, but said analysts did not fully account for restructuring related to a plant closure and higher taxes. Bobbi Rebell reports.
General Motors missed analysts profit forecasts, but says they had their estimates wrong. GM earned 67 cents a share, analysts polled by Thomson Reuters expected 88 cents. Revenue rose less than forecasts as well. But the automaker says analysts did not fully account for restructuring related to plans to close a plant in Germany, or for a higher than expected tax rate. GM Chief Financial Officer Chuck Stevens telling reporters quote: "We needed to book some of the restructuring costs, primarily related to the severance portion of that program." Nevertheless, shares of General Motors dropped in reaction to the news. Buckingham Research's Joseph C. Amaturo defended the stock, saying: "Despite a significant earnings miss on the EPS line, GM posted free cash flow that was in-line with consensus expectations and was a quality number. We believe most of the negative catalysts for the stock have already been priced." Net income did rise year over year, and operating profits rose 58 percent. The increased profit was driven by stronger pricing for its redesigned full-size pickup trucks, the Chevy Silverado and GMC Sierra. GM says its business in Europe is improving, but that the downside risk in South America was rising, and the regions around China were also under pressure.