DETROIT (TheStreet) -- GM's (GM) first-quarter net income fell 86% as the company took a first quarter $1.3 billion charge for recalls associated with a faulty ignition switch. But the results still beat Wall Street estimates.
Net income excluding items was $125 million, or 6 cents a share. Analysts surveyed by Bloomberg estimated 4 cents. Revenue rose 1% to $37.4 billion. Analysts had estimated $38.4 billion.
In the same quarter a year earlier, GM earned $900 million, or 58 cents a share.
In premarket trading, GM shares were trading up $1.03 to $35.42.
The automaker's results were clouded by special items. GM took a pretax charge of $1.3 billion, or 48 cents a share, for recall costs. Also, GM took a net loss from special items, primarily related to setting an exchange rate for Venezuelan assets, of $419 million, or 23 cents a share. Also, the company had $300 million in restructuring costs, mainly in Europe.
"The performance of our core operations was very strong this quarter, reflecting the positive response of customers to the new vehicles we are bringing to market," said CEO Mary Barra, in a prepared statement. "Our focus remains on creating the world's best vehicles with the highest levels of safety, quality and customer service, while aggressively addressing our business opportunities and challenges globally."
GM said earnings before interest and tax adjusted was about $500 million, including the impact of the $1.3 billion pretax charge for recall-related costs and $300 billion in restructuring costs. In the first quarter of 2013, EBIT-adjusted was $1.8 billion.
During the quarter, GM reported automotive cash flow from operating activities of $2 billion and automotive free cash flow of about $200 million. "Our revenue and cash flow improved this quarter and our underlying business performance remains on plan," said Chief Financial Officer Chuck Stevens, in a prepared statement.
"Executing flawless launches and using our strength in the U.S. and China to restructure key global operations will continue to be our focus this year," Stevens said.
Written by Ted Reed in Charlotte, N.C.
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