GM delivers a higher-than-expected fourth-quarter profit

Photo courtesy: Bill Pugliano — Getty Images

General Motors on Wednesday posted fourth-quarter earnings far above analysts’ expectations even as recall costs hit North American profit margins.

Excluding special items, the largest U.S. automaker earned $1.19 per share, compared with the analysts’ average estimate of 83 cents, according to Thomson Reuters I/B/E/S.

Net income rose to $1.1 billion, or 66 cents a share, from $900 million, or 57 cents a share, a year earlier.

North American profit margins for the full year were 6.5 percent. Excluding the additional costs for a record vehicle recall in 2014, the margin would have been 8.9 percent, GM (GM) said.

The company also announced it was likely to raise its dividend for the second quarter by 20% to 36 cents per share.

For much of the past year, GM has been embroiled in a scandal surrounding recalls of cars for faulty ignition switches. The automaker has set aside between $400 and $600 million to pay victims and families through a compensation fund, which stopped accepting applications on Jan. 31.

Other car companies have also faced recall troubles, including Honda and Ford (F).
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