GM Reports Record Earnings
Tuesday July 20 8:36 AM ET
DETROIT (AP) - General Motors Corp. (NYSE:GM - news), benefitting
from increased sales of light trucks in the hot North American
market, said today that it posted a record $1.7 billion operating
profit in the second quarter - a more than five-fold increase over
strike-depressed earnings a year ago.
The world's No. 1 automaker earned $2.66 a share, compared with $306
million, or 40 cents a share, for the April-through-June period of
1998 after excluding earnings from GM's former parts unit, Delphi
Automotive Systems. Delphi was made independent from GM in May.
Sales totaled $45.1 billion, compared with adjusted revenue of $37.3
billion a year ago.
GM's earnings exceeded Wall Street analysts' expectations. The average
estimate of 15 analysts surveyed by First Call Corp. was $2.56 a
share.
As was the case with Ford Motor Co. (NYSE:F - news), which reported
strong North American results last week, GM earned the bulk of its
profit from strong sales in the United States.
''In one of the most intensely competitive markets in recent history,
our North American automotive operations took advantage of the strong
demand and recorded net income of $1.5 billion, despite the extremely
tough pricing environment in this key region,'' Chairman Jack Smith
said.
GM also showed improvement in Europe, where operating earnings of $187
million represented a 51 percent improvement over the $124 million
earned a year ago. GM credited strong sales of its new Opel and
Vauxhall Zafira minivan and redesigned Opel Astra subcompact.
Elsewhere, GM lost money.
In the Asia-Pacific region, GM's red ink totaled $81 million, compared
with a $36 million loss in the same period of 1998. In Latin America,
Africa and the Mideast, GM lost $38 million, compared with a $48
million profit a year ago.
For the first half of the year, GM's worldwide operating earnings
totaled nearly $4 billion, or $5.33 a share, double the $2 billion, or
$2.33 a share, in the first half of 1998. Revenue totaled $87.5
billion, up 13 percent from $77.3 billion a year ago.
GM's earnings in the second quarter of 1998 were affected by strikes
at two parts plants in Flint, Mich., which cost the company an
estimated $890 million, or $1.32 a share, after taxes. |
