GM first-quarter profit misses estimates on South America, Russia weakness
By Ben Klayman and Bernie Woodall
DETROIT (Reuters) - General Motors posted a smaller-than-expected quarterly profit on Thursday on weakness in South America and Russia and a higher tax rate, sending shares down 3.5 percent.
"Clearly the macro environment in South America, and it's primarily Brazil, deteriorated versus even where we thought it was going to be," Chief Financial Officer Chuck Stevens told reporters at the company's Detroit headquarters.
He expects the region to be "reasonably challenged" through the first half of the year, but said GM is targeting second-half profits similar to the same period last year.
Stevens said the No. 1 U.S. automaker has cut jobs and will reduce production shifts at plants in Brazil, generating about $200 million in annual savings. GM lost $214 million in South America in the first quarter.
Stevens affirmed the company's overall 2015 outlook for improved profit and said it remained on track in 2016 to hit 10 percent profit margins in North America and return to profitability in Europe.
GM Chief Executive Officer Mary Barra dismissed reports of a possible merger, saying the company would focus on its own operations. "We're not going to entertain anything that distracts us from accomplishing that," she said.
Fiat Chrysler CEO Sergio Marchionne has shown an interest in a deal with GM.
First-quarter net income rose to $945 million, or 56 cents a share, from $125 million, or 6 cents a share, a year earlier. Last year's results included charges related to recalls including those from a defective ignition switch. Continued...