DETROIT — General Motors' first-quarter net income doubled from a year earlier, though operating profit fell 11 percent primarily due to headwinds in China and downtime at the company's full-size SUV plant in Texas.
GM on Tuesday reported net income of $2.15 billion, up from $1.04 billion in the first quarter of 2018. Its adjusted earnings before interest and taxes dropped $300 million to $2.3 billion, as revenue declined 3.4 percent to $34.9 billion. GM's adjusted earnings per share of $1.41, a key estimate for financial analysts, topped Wall Street estimates averaging $1.10. That includes a 31-cent revaluation from GM's stakes in Lyft Inc. and PSA Group.
GM’s first-quarter earnings last year were hampered by two factors — downtime in full-size pickup production and a restructuring in Korea — that are now paying dividends.
The ongoing launch of its redesigned full-size pickups and the restructuring actions begun last fall helped GM offset headwinds in China and a 23,000-unit loss of full-size SUV production in the first quarter of this year, GM CFO Dhivya Suryadevara said.
“This was per plan and it’s setting us up well as we look at the other three quarters of the year,” she told reporters Tuesday morning, adding that the company has completed its downtime at the SUV plant in Arlington, Texas.
The automaker's global deliveries in the first quarter slipped 10 percent from a year ago to 1.9 million, including a 17 percent decrease in China and 7 percent slide in the U.S.
Suryadevara said GM still expects strong results for the year, including adjusted earnings of $6.50 to $7 a share and adjusted automotive free cash flow of $4.5 billion to $6 billion. Those forecasts are among the reasons why many analysts remain bullish on GM, compared with Ford Motor Co. and Fiat Chrysler.
Expected to offset headwinds this year are improvements in full-size pickup production, the launch of GM's redesigned heavy-duty pickups and an influx of new products toward the end of the year — particularly in China, where GM plans to introduce more than 20 new and updated models in 2019.
“We have a track record of delivering on our commitments, despite the industry macro challenges,” GM CEO Mary Barra said during a conference call. “As we move forward, we’re going to continue to seize every opportunity to manage what is in our control.”
GM will take some downtime for its heavy-duty pickups for retooling in the second quarter, Suryadevara said. It expects production to be flat compared to last year, when it also scheduled downtime at its heavy-duty pickup plant in Flint, Mich.
GM’s announced restructuring last year, which included plant idling and salaried workforce reductions, contributed about $400 million to the automaker’s first-quarter bottom line. Suryadevara said those actions remain on track to save $4.5 billion by the end of next year, including $2 billion to $2.5 in 2019.
North America profit down
North American earnings decreased 15 percent to $1.9 billion in the first quarter, with an adjusted margin of 6.9 percent. Profit from the company's international operations plunged 84 percent to $31 million.
GM Financial earned a $359 million profit, down 19 percent from $443 million a year earlier. That decline, Suryadevara said, was due to positive one-time benefits in the first quarter of 2018.
Adjusted earnings for GM Financial, she said, are expected to be flat overall for the year.
The automaker spent $200 million on its Cruise autonomous vehicle operations in the first quarter. GM said it expects to spend $1 billion on GM Cruise for the year.
GM shares fell 2.5 percent to $39.01 in midday trading.