GM Earnings Result of Tax Gains

Reuters reported that GM's record fourth quarter earnings included $577 million worth of tax benefits from the settlement of foreign tax disputes and other special items. Analysts claim that GM's 4th quarter operating earnings actually fell to $1.5 billion or $1.49 a share.

A comparison of GM's pre-tax operating income for North American Operations in the final quarters of 1994 and 1995 shows a drop from $760 million to $656 million. The decrease is due to a 6.6% drop in North American wholesale sales, which fell to 1.36 million. This drop was a offset by falling incentives (from $738 to $633 per unit) during the same period. GM's pre-tax income for the whole of 1995 more than doubled, rising from $1.59 billion in 1994 to 3.35 billion.

Paul Dever -- The Auto Channel