DETROIT -- General Motors posted pretax operating profit of $10.8 billion for 2015, including $2.8 billion in the fourth quarter. The automaker reduced its losses in Europe.
GM's profit was driven by booming sales of pricey SUVs and pickups in the U.S. and strong earnings in China despite the slowing market there.
The full-year operating profit excluding one-time items -- the figure that GM says best reflects its underlying performance -- marked a 67 percent jump from 2014 and was the highest amount since before the company’s 2009 bankruptcy.
GM’s fourth-quarter pretax operating profit excluding one-time items rose 15 percent to $2.8 billion.
Net income for the September-to-December period was $6.27 billion, including a noncash gain of $3.9 billion from the revaluation of certain tax assets in Europe. The gain reflected GM's expectation that it will break even in Europe this year.
Fourth-quarter revenue was flat at $39.62 billion.
"We continue to strengthen our core business, which is laying the foundation for the company to lead in the transformation of personal mobility," GM CEO Mary Barra said in a statement.
Europe improves
In Europe, GM reduced its full-year loss by 43 percent to $800 million from $1.4 billion in 2014. GM Europe's fourth-quarter loss was $300 million, a 25 percent improvement on the $400 million loss reported in the final quarter of 2014.
The results were hurt by a decline in market share related to the company’s wind-down of operations in Russia.
Chief Finance Officer Chuck Stevens reiterated GM’s expectation that it will return to breakeven in Europe this year. He said GM has already restructured and now "we've got the right cost structure."
Opel CEO Karl-Thomas Neumann said the breakeven target is in sight in an interview last month with Automotive News Europe.
Opel/Vauxhall vehicles sales rose by 3.3 percent last year to more than 1.1 million vehicles, the best result in four years, the division said in a statement on Jan. 8.
U.S. strength
GM generated nearly all of its profits in North America, where sales of pickups and SUVs continue to grow. Fourth-quarter pretax profit in North America rose 25 percent to $2.8 billion. Strong gains in truck sales helped push pretax profit margins to 10 percent for the quarter, up from 8.7 percent a year earlier.
For the year, North American operating profits hit $11 billion, a 67 percent jump from 2014, a year marred by high costs related to safety recalls totaling around 30 million vehicles.
Stevens said GM expects continued strength in the U.S. market – by far its most profitable region – despite investor concerns that auto sales have peaked. “We don’t subscribe to that view,” Stevens said. “We believe that the industry fundamentals and the economic fundamentals … are such that we would expect to see a strong U.S. industry for the next number of years.”
He acknowledged, though, that automotive is a “cyclical industry” and that GM has structured its cost base to be able to break even if the market tanks. “We believe we’re well positioned for the downturn,” he said. “We just don’t believe it’s going to happen anytime soon.”
Higher Asia profit, South America loss
The company’s International Operations division, which includes China as well as several Asian markets such as Korea and India, posted a 3 percent increase in quarterly pretax profit, to $408 million.
The unit would have lost money without China: GM’s fourth-quarter income from its joint-venture partnerships in China rose 12 percent to $572 million, despite shaky economic conditions during the quarter and a steep drop in China’s stock market. GM credited strong demand for its new crop of crossovers, including the Buick Envision.
In the recession-plagued South American market, GM lost $47 million for the quarter, vs. an $89 million pretax profit a year earlier. GM said it has taken a number of steps to minimize its losses there, including a 20 percent reduction in labor costs and a 35 percent cut in vehicle production.
Pretax profit at GM Financial rose 40 percent to $167 million.
GM said it will pay most of its 49,600 UAW-represented employees profit-sharing checks of $11,000 later this month, a record amount.
Reuters and Bloomberg contributed to this report
