GM profit misses estimates; losses in Europe deepen

Thu Feb 14, 2013 3:49pm EST
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By Ben Klayman

DETROIT (Reuters) - General Motors Co (GM.N: Quote) reported a weaker-than-expected fourth-quarter profit on Thursday, citing wider losses in Europe and lower vehicle prices plus higher costs in its core North American market.

The largest U.S. automaker also made an accounting change in the quarter, intended to signal confidence that it will continue to be profitable in coming years. The move resulted in a $26 billion charge for the quarter, however.

Shares of GM, which did not change its 2013 profit outlook, initially bounced between positive and negative territory and were off 3.4 percent at $27.69 in late trading.

"An entrenched GM investor may see no need to sell, while a prospective investor may see no need to rush in," Morgan Stanley analyst Adam Jonas said in a research note.

GM went public in the autumn of 2010, after its 2009 bankruptcy restructuring and $50 billion U.S.-taxpayer bailout.

Several analysts said GM's $699 million operating loss in Europe in the quarter was wider than they had expected.

Conditions in the region will be challenging for another few years, said Edward Jones analyst Christian Mayes, who has a "hold" rating on GM's stock. "They're moving in the right direction, but it's difficult over there to move fast because it's so challenging to shut down plants."

GM posted a profit of 48 cents per share before one-time items, 3 cents shy of the analysts' average estimate, according to Thomson Reuters I/B/E/S.   Continued...

The General Motors logo is seen outside its headquarters at the Renaissance Center in Detroit, Michigan in this file photograph taken August 25, 2009. REUTERS/Jeff Kowalsky/Files