GM First-Quarter Profit Shaved by Recall Costs

One of the most massive recalls in GM's history sliced the automaker's profit by 88 percent in the first quarter.

GM's first-quarter profit slipped on recall charges, but it still beat Wall Street estimates, helped by pricing.STAN HONDA / AFP - Getty Images
SHARE THIS —

A series of massive recalls has sliced GM's profit by 88 percent in the first quarter.

The company is embroiled in a wide-ranging controversy over an ignition problem in nearly 3 million cars, linked to at least 13 deaths. Earlier this week, documents revealed that the Detroit-based automaker waited years to pull about 335,000 Saturn Ions off the road because of steering failures.

Net income in the first quarter fell to $108 million, or 6 cents a share, from $873 million, or 58 cents a share, in the year-earlier period.

GM's first-quarter profit slipped on recall charges, but it still beat Wall Street estimates, helped by pricing.STAN HONDA / AFP - Getty Images

The Detroit automaker said it took a $1.3 billion charge for recalling about millions of vehicles worldwide. The company also incurred $300 million in restructuring costs, mostly in Europe. And it took a $419 million charge due to a change in the way it values Venezuela's currency.

GM's Chief Financial Officer Chuck Stevens told CNBC it's too early to say if the automaker will have to take additional charges related to the recall.

"That's overshadowing our overall results. If you look at the core underlying performance we were quite pleased by Q1 results," he told CNBC. "North America, excluding the recall, earnings were actually up $500 million year-over-year with margins up just over 8 percent."

GM made 6 cents per share, down from 58 cents per share a year ago. But the results still topped Wall Street estimates on strong pricing for its vehicles.

Excluding one-time items, GM made 29 cents per share, far above Wall Street estimates of 3 cents per share.

-- Reuters and CNBC contributed to this report.