GM 1Q profit dragged down by recalls

DETROIT (AP) — General Motors today reported its worst financial results in more than four years as the costs of a series of recalls dragged down earnings.

First-quarter profit fell 86 percent to $125 million as the Detroit automaker took a $1.3 billion charge for recalling about 7 million vehicles worldwide. GM also incurred $300 million in restructuring costs, mostly in Europe. And it took another $419 million charge due to a change in the way it values Venezuela's currency.

GM made 6 cents per share, down from 58 cents per share a year ago. The recall charge alone cut 48 cents off the company's first-quarter earnings.

But excluding one-time items, GM made 29 cents per share, far above Wall Street estimates of 3 cents per share. Shares rose 3.7 percent to $35.66 in premarket trading.

The bottom line result was GM's worst since late 2009, when it posted a $4.4 billion loss for the five months after leaving bankruptcy protection. It was a rough start to what many expected would be a strong year for the Detroit automaker.

The U.S. government, which bailed out the company five years ago, sold its remaining stake in the company at the end of last year, freeing GM of the "Government Motors" nickname. In January, the company announced its first quarterly dividend in six years. And GM has rolled out multiple new models in recent months including high-profit pickup trucks and full-size SUVs.

But the recalls overshadowed the first quarter under the leadership of new CEO Mary Barra. GM is recalling 2.6 million older small cars because the ignition switches can slip from "run" to "accessory" or "off," shutting down the engine. That knocks out power steering and brakes and can cause drivers to lose control and crash. It also disables the air bags.