U.S. Launch costs, and ongoing European losses caused what GM says is a temporary setback.
The GM Board of Directors has approved a quarterly dividend of $0.59375 per share on its Series B mandatory convertible junior preferred stock. The dividend of 4.75% annually is payable 3 September 2013 to Series B holders of record as of 15 August. The total amount of the dividend is $59.4 million.
The dividend on the hybrid stock – which is a mixture of equity and debt – is cumulative. GM has not paid a dividend on its common stock since 2008 before it filed for bankruptcy.
The convertible preferred stock was offered at $50 per share when GM emerged from bankruptcy. The shares automatically convert to a variable amount of GM common stock on 1 December 2013. If GM common is trading at $33 for a period preceding that, preferred shareholders will at least break even on the $50 per share price paid. The leverage works both ways on the conversion price, though.
GM forecasts global auto industry growth in 2013, mostly by sales increases in the United States and China. Europe is expected to decline yet again. GM’s first quarter net income of $0.9 billion, or $0.58 per fully diluted share, was down from $1 billion in the prior year quarter. The results include a net loss from special items that reduced net income by $0.2 billion, or $0.09 per fully diluted share. (Read AutoInformed on GM Q1 Earnings Drop 14% to $0.9 Billion. North America Weak. Europe Weaker. Cash Flow -$1.3 Billion)
Revenue dropped during the first quarter of 2013 to $36.9 billion, compared to $37.8 billion in the first quarter of 2012. Earnings before interest and tax adjusted was $1.8 billion, compared to $2.2 billion the first quarter of 2012. First quarter EBIT-adjusted results for 2013 include the impact of $0.1 billion in restructuring costs.
Based on some growth from new vehicle introductions, GM expects its global profitability to rise only modestly in 2013 on earnings before interest and tax (EBIT) adjusted basis, with improvements anticipated from each region.
Some of the vehicles GM is launching around the world include the Chevrolet Silverado and GMC Sierra full-size pickups, Chevrolet Impala and Corvette Stingray, and Cadillac CTS in North America; the Opel Cascada and Mokka, and Chevrolet Trax in Europe; the Chevrolet Onix and Spin in South America; and the Cadillac XTS and Chevrolet Sail in China.
