General Motors said that its net income in the first three months of 2014 dropped 85% following safety recall costs and a one-off charge for alterations of the Venezuelan currency.
The largest car maker in the US said it raked in $125 million in the first quarter compared with $865 million the same period a year earlier.
The company firm used $1.3 billion in the period to take care of the recall of about 7 million vehicles. The sum also covered the recall of some 2.6 million cars for faulty ignition switches.
GM also incurred a one-off charge of $419 million to address devaluation of the Venezuelan currency.
According to The New York Times, G.M’s boss Mary T. Barra said the company’s operations were solid in the three-month period, in spite of the on-going predicament following the company’s failure to recall the Chevrolet Cobalt and other cars, 10 years after discovering the vehicles had a faulty ignition system that caused airbags not to deploy in the event of a crash.
“The performance of our core operations was very strong this quarter, reflecting the positive response to the new vehicles we are bringing to market,†the chief executive said in a statement.
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However, the results beat analysts’ estimates. The automaker had previously announced it was setting aside $1.3 billion for use on several recalls since the beginning of 2014.
GM raked in $37.4 billion in revenue during the quarter, up from $36.9 billion last year, the firm said.
Its North American business took care of the recall costs. Within the quarter, GM said its home market generated $557 million. That compares with $1.4 billion over the same period a year earlier.
Chief Financial Officer Chuck Stevens said the firm was still evaluating its options for the victims of ignition glitches, which have been associated with at least 13 deaths, as reported by Reuters. To contact the reporter of the story: Yashu Gola at yashu@forexminute.com
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