DETROIT — General Motors on Wednesday forecast flat profits for 2020 and reported a better-than-expected fourth quarter as it kicked off an effort to win over investors stampeding into shares of electric car rival Tesla.
GM said it expects earnings per share for 2020 in a range from $5.75 to $6.25, excluding one-time items, taxes and interest. Analysts are expecting GM to earn $6.23 this year on a comparable basis, according to IBES data from Refinitiv.
GM's fourth-quarter profits took a $3.6 billion hit from a 40-day United Auto Workers strike that shut down the automaker's profitable U.S. operations.
The company said pre-tax profits were 5 cents a share for the latest quarter excluding certain restructuring costs, down from $1.43 a year earlier. Analysts had forecast pre-tax income of a penny a share for the latest quarter.
Including restructuring costs, GM had a fourth quarter net loss of $194 million, or 16 cents a share.
Revenue in the quarter fell nearly 20% to $30.8 billion.
On Tuesday, rival Ford delivered a weaker-than-expected 2020 forecast, warning of higher warranty costs, lower profits at its credit arm and continued investments in future technology such as self-driving cars, sending its shares sliding.
GM said income from its joint ventures in China fell to $200 million in the fourth quarter from $300 million a year earlier, as wholesale vehicle deliveries fell by 20%.
The Detroit company said “slower adoption of new fuel-efficient technology” by Chinese customers hit fourth quarter results from the world’s largest auto market. The company is backtracking from an effort to sell vehicles with three-cylinder engines in China, and will offer more four-cylinders.
GM executives have previously said they expected the market downturn in China to continue in 2020. Its CFO said Wednesday the Chinese market would be "volatile" this year.
However, that forecast was before the appearance of a fast-spreading coronavirus in China that has killed nearly 500 people globally so far and crippled the country's economy.