DETROIT -- U.S. tax reform caused General Motors to report a loss of $4.9 billion for the fourth quarter, while the company achieved record operating profit for the period.
Despite a $7.3 billion noncash charge, GM narrowed its fourth-quarter losses by $1.9 billion compared with the same period in 2016. Without the charge, GM would have earned $2.4 million for the quarter.
Wall Street liked the results. GM shares rose 5.8 percent to close at $41.86 during a volatile day of trading.
The results are based on continuing operations, which do not include those such as its former Opel/Vauxhall business, sold by GM to PSA Group in 2017. Overall, the net loss was $5.15 billion, with a larger tax-related charge of $7.9 billion.
"The important aspect is to look at the operating results," GM CFO Chuck Stevens said on Tuesday with the release of the quarterly and full-year reports
In the fourth quarter, GM's adjusted earnings, before interest and taxes, increased 19 percent to $3.09 billion, and its global margin increased 1.7 percentage points to 8.2 percent. Revenue declined 5.5 percent to $37.7 billion due to lower volumes in North America.
For the year, the automaker's adjusted earnings, before interest and taxes, equaled its $12.8 billion record from 2016, while income plummeted 96 percent to $300 million largely due to the tax changes and a largely noncash charge of $6.2 billion from the sale of its European operations.
“We couldn’t’ be more pleased about our results and the execution, the disciplined execution, across all of our business units in 2017,” Stevens said.
GM last month advised its financial results in 2018 to be in line with earnings in 2017, followed by an "even better" performance in 2019.
