General Motors Company (NYSE: GM) stock, down as much as 2.2% in early trading Thursday, recovered as investors saw some positives in the big earnings miss from the automaker.
The surprising results were a combination of the impact of slower than expected sales outside of North America and China as well as heavy investment in the company's restructuring efforts.
General Motors earnings were $0.57 a share for the December quarter, far below the $0.87 a share analysts had been expecting. Excluding one-time charges, GM earned $0.67 cents a share, still nowhere near expectations.
Revenue, however, rose 3% to $40.5 billion, although that also slightly misses expectations of $40.8 billion.
But investors soon recognized that GM's earnings miss isn't so much a story of a faltering company as it is one of a company in transition.
That's probably why Wall Street reconsidered as the day went on, with GM stock essentially unchanged by noontime.
Here's what we learned from the GM earnings report…
Why This Was Not a Typical Quarter for GM Earnings
"This was a relatively noisy quarter," Edward Jones equity analyst Christian Mayes told The Wall Street Journal. "There were a lot of one-time items, but stripping those out, GM missed earnings expectations by a wide amount. International operations looked weak, with Europe still losing money for GM and South America barely breaking. Perhaps what we're seeing is an element of clearing the decks for the new management team coming on board with some of the restructuring charges."
Breaking the numbers down, GM actually did very well in North America and China.
In North America GM gained market share and operating profit soared to $1.89 billion from $1.14 billion a year earlier. And in China, GM's largest market, the number of vehicles sold rose 13%, putting an exclamation point on a record year there.
But it was the rest of GM's international operations that undermined this quarter's earnings. Overall, operating profits in this segment plummeted 69%, to $208 million from $676 million a year earlier, driven by woes in India, South America, and Australia.
Even in some of the bad news there was good news…