DETROIT (Bloomberg) -- This was supposed to be the year when General Motors made a record $10 billion in profit.
Now, CEO Mary Barra will be hard pressed to avoid posting a loss when GM announces its first-quarter earnings on Thursday.
The cost of recalling 2.59 million vehicles linked to the deaths of at least 13 people -- combined with continued losses in Europe and new challenges in Russia, Australia, Asia and South America -- have prompted analysts to downgrade their earnings estimates.
"It's certainly been a trying 100 days" since Barra started on Jan. 15, said Brian Johnson, an industry analyst with Barclays Plc. This week, Johnson lowered his earnings estimate to a penny-per-share loss from a 20-cent profit.
He predicted that the company would have its worst results since the fourth quarter of 2009, when GM was fresh from its U.S. government-backed bankruptcy reorganization.
Over the past four weeks, all 11 analysts surveyed by Bloomberg lowered their estimates for GM’s first-quarter adjusted EPS, bringing the consensus estimate down 92 percent, to 4 cents a share.
A year ago, GM reported a first-quarter net profit of $1.18 billion, or 67 cents per share on an adjusted basis.
This quarter, it has forecast taking a $1.3 billion loss for costs related to recalling 7 million vehicles, including those with faulty ignition switches. It has also said it will take a $400 million pretax charge for changes in Venezuela's currency. That will come on top of any losses in Europe, which have totaled more than $18 billion since 1999.
In addition, Johnson estimated GM will have restructuring costs in Asia and South America.
"We continue to expect a 'kitchen sink' quarter for GM," he told investors in a note.
As recently as two years ago, analysts estimated that GM's 2014 adjusted income would exceed $10 billion. That average slid to $7.93 billion during December, when GM announced Dan Akerson would retire early as CEO and be succeeded by Barra.
Now, the full-year estimate of 14 analysts surveyed by Bloomberg averages $5.58 billion.
GM's biggest calendar-year profit was $9.19 billion in 2011.
The original optimism, coming after the reorganized GM's 2010 initial public offering, was based largely on the belief that the company's U.S. market share would rise, its costs in North America would be lower, and its operations in Europe and South America would be doing better, said Adam Jonas, an analyst with Morgan Stanley.
"Since the IPO, GM has executed well in many areas, but overall nowhere near as strong as our admittedly high expectations," Jonas wrote in a note to investors in October. "There's just no other way to put it -- we were off by a country mile."
Optimism for GM had been building for the past year after the U.S. Treasury began unwinding its ownership stake in the automaker, one of the last vestiges of the $50 billion U.S. government bailout and 2009 bankruptcy reorganization.
Even before the recall, GM was trying to lower expectations for the year. In January, the company said it expected adjusted earnings before interest and taxes to improve "modestly" this year as improved performance in the U.S. and China would be largely offset by $1.1 billion in restructuring costs.
Adjusted Ebit would be softer in the first quarter because of losses associated with currencies and costs to roll out new trucks, executives said.