General Motors Co. (GM, Financial) stock was down over 3.7% in early afternoon trading on Tuesday as the company's sales continue to decline despite a strong earnings report for the first quarter of the year. The company announced it will take a $100 million charge for its Venezuelan operations, which authorities seized last month.
The company is open to discussing its operations in the country, but has ceased all operations since April 18 when the plant was seized via a court order.
The news got worse for the automaker on Tuesday following a release of the company's April sales figures. Its U.S. sales fell to 244,406 vehicles, down 5.8% compared to the same period last year. The company's new vehicle forecasts for the month were 258,000.
Silverado pickup sales, the company's top-selling pickup, fell 19.7% on the year to just 40,154 units. The company's GMC Sierra units fell 15.3% to 17,400. The company's sales of the Colorado and GMC Canyon also declined 11% and 21.7% respectively.
GM's Cadillac brand sold 12,300 units, an increase of 9.5% in April. Buick sales also saw an uptick of 17% on the year, with the Buick Encore accounting for a 27% gain on the year.
"We see crossovers becoming an even bigger part of the industry and GM sales over the next five years," Kurt McNeil, U.S. vice president of sales operations, said . "Just five years ago, about one in four GM sales were crossovers. Today, they account for almost one-third of our deliveries and we see more growth ahead."
The company's struggling sales did not impact first-quarter results as the company's earnings rose 33% to $2.6 billion on the quarter. The company's earnings for the same quarter a year ago were $1.93 billion. The strong quarter is a bright spot for the company as the industry shows signs of contracting after a seven-year period of growth.
GM's bottom line was impacted by weak European sales, which cost the company $200 million on the quarter. The segment will be sold to PSA Groupe for $2.2 billion. The sale is part of the company's transition to refocus on the core business and higher return opportunities.
The company has plans to expand its operations in Detroit, and announced an extra shift in Oshawa and the addition of 500 jobs to help expand its operations. The company is focusing on self-driving vehicles, with plans to hire another 1,100 works in California to boost sales.
Disclosure: Author does not own any interests in the companies mentioned.
Start a free 7-day trial of Premium Membership to GuruFocus.
