U.S. defined benefit pension plan deficit balloons to US$13.3 billion despite asset returns of 11 per cent
DETROIT (Reuters) — General Motors posted a weaker-than-expected fourth-quarter profit as disappointing performance overseas offset strong results in North America.
"We obviously have work to do still and a long way to get to the objectives we ultimately want to get to," GM Chief Financial Officer Dan Ammann told reporters.
"We clearly have work to do in Europe. We have work to do in the South America business. Frankly, we have work to do all around the company in terms of cost opportunity," he added.
GM said its defined benefit pension plan in the United States earned asset returns of 11.1 per cent last year, but they ended the year with a US$13.3 billion shortfall, compared with US$11.5 billion in 2010. GM expects returns of 6.2 per cent in 2012 due to a greater shift to fixed income investments.
Ammann said GM has not gone far enough in cutting costs in its European operations, but declined to provide a 2012 financial forecast for a unit that the No. 1 U.S. automaker has struggled to return to profitability. Overall, GM expects 2012 sales to top the US$150.3 billion it saw in 2011 and its market share to remain flat.
Net income attributable to common shareholders was US$500 million, or 28 cents a share, compared with US$500 million, or 31 cents a share, in the year-ago quarter.
Excluding one-time items, GM earned 39 cents a share, two cents below analysts' average forecast in a poll by Thomson Reuters I/B/E/S.
Sales in the quarter rose three per cent to US$38 billion, compared with the US$38.21 billion analysts had expected.
For 2012, GM expects to raise vehicle prices and contain cost inflation, but the sale of more cars than trucks will hurt profit margins.
