GM sees higher 2017 earnings; shares tumble on higher costs

General Motors posted strong car sales again last year and signaled Tuesday it expects robust earnings in 2017, but the company's share price fell sharply on worries about higher costs.

Earnings in the fourth quarter for the largest US car company fell to $1.8 billion, more than 70 percent below the year-ago period, but that stunning difference was primarily due to a large one-time tax item that boosted earnings in the comparable period of 2015.

However, revenues in the latest quarter jumped nearly 11 percent to $43.9 billion, boosted by a hefty jump in North American auto sales.

GM also confirmed it sees 2017 earnings-per-share of between $6.00 and $6.50 after it notched $6.00 a share for 2016.

"Solid results in the fourth quarter capped another record year of earnings and beat the commitments we outlined for 2016," said GM chief financial officer Chuck Stevens.

But analysts cited concers over higher-than-expected corporate expenses in the quarter due to increased spending on autonomous and mobility investments. The category that contains this type of spending was up $400 million.

Spending in this category "is likely to remain a headwind into 2017 and beyond," Deutsche Bank said a research note.

GM shares tumbled nearly five percent in early trading to $35.05.

Car sales in North America surged in the final three months of the year by 8.0 percent to more than a million vehicles. The company also reported gains in other key regions, including China.

Brands with large gains included Chevrolet, Cadillac and the Baojun.

But the company reported operating losses for the quarter and the year in Europe and South America. It said the weak British pound and falling Mexican peso negatively impacted results.

GM has come under fire from President Donald Trump for manufacturing cars in Mexico and exporting them to the United States, but Stevens said there were no plans to shift from its current profile.

"At the end of the day, there's a number of factors that go into footprint decisions and they're long-lead," Stevens told CNBC.

Net income for the year was $9.4 billion, down 2.7 percent from 2015. Adjusted income was a record $12.5 billion, up 15.9 percent.