GM earns $0.9B in Q4, less than expected

General Motors reported good, but lower-than-expected, quarterly earnings this morning, and investors bid down its share price as much as 4.4%, to $33.70, in trading before the market opened.

Shares rebounded and opened at $34.83, down just 1.1%.

The results were up slightly from a year ago, and were in line with guidance GM brass gave at the Detroit auto show last month, but some analysts had much higher expectations.

GM said its net income in the fourth quarter was $913 million, up 2% from a year earlier, or 57 cents a share -- 67 cents before special charges. Analysts' consensus had been 87 or 88 cents.

Ryan Brinkman, analyst at J.P. Morgan, had forecast 88 cents. He told clients in a note that the shortfall was mainly because North American operations, while improving strongly, weren't as good as expected.

He said much better numbers could come as soon as the second quarter this year.

Joseph Spak, at RBC Capital Markets, had forecast 80 cents. He called the GM results "a bit messy and disappointing."

He agreed with Brinkman the the second quarter this year is key. That's when North American operations' "profitability should really shine through, as a make or break quarter for the stock."

Revenue in the quarter rose slightly, to $40.5 billion, up from $39.3 billion. It was automaker's 16th consecutive quarter of black ink since the 2009 Chapter 11 bankruptcy reorganization.

Full-year 2013 net was $3.8 billion, down from $4.9 billion a year earlier.

Full-year North American pre-tax earnings were a record $7.5 billion.

Earnings in the quarter before interest, taxes and one-time items, which GM says is the best measure of its performance, was $1.9 billion, up from $1.2 billion a year earlier.

New CEO Mary Barra, in a statement, tried for an optimistic tone.

"Launches of some of the best vehicles in our history combined with significant improvements in our core business led to a solid year," she said..

"The tough! decisions made during the year will further strengthen our operations. We're now in execution mode and our sole focus will be on delivering results on a global basis."

This year's results could be soft, said Brian Johnson at Barclays, based on forecasts GM gave before the earnings announcement. "We remind investors that...North America and Europe (are) likely lower than initial investor expectations," Johnson said in a note to clients ahead of the earnings.

GM forecast restructuring costs of $1.1 billion this year.

"GM seems to have stabilized in the past 12 months, not just in the U.S. but globally. Transaction prices, sales and market share all indicate moderate growth except in Europe, where ongoing losses also appear to be stabilizing," said Karl Brauer, senior analyst at Kelley Blue Book.

"GM wants to maintain transaction prices and profitability going forward, which means limiting incentive spending," he added.

Much of a Detroit car company's results are based on sales of high-profit pickups, and Johnson said that while GM's new-design full-size pickups "have been largely successful in the US, GM has still struggled with share in the large pickup market, which dipped to 33% in January, and is down significantly from 40% share in 2011."

If GM has to begin discounting the new trucks heavily to regain share, that could undercut the launch later this year of the mid-size Chevrolet Colorado and GMC Canyon.

GM hopes to use those to draw new buyers, and to eat into leader Toyota's share of the small-truck market by offering better-furnished Colorados and Canyons at similar prices to lesser-equipped Toyota Tacomas.

Jesse Toprak, chief analyst at Cars.com, said, "Recently redesigned models helped the company's average transaction prices to climb nearly $2,000 in Q4 despite more generous incentive spending.

"We predict that 2014 will be a year of steady growth for GM with continued expansion in China, recovery in Europe and modest gains in Nor! th Americ! a."