GM 2nd-Quarter Profits Beat Forecast

General Motors Profits More Than Double to $1.3 Billion in 2nd Quarter, Beating Expectations

DETROIT AP reported that General Motors Corp.'s profit more than doubled to $1.3 billion in the second quarter, citing improved sales, higher North American production and the benefits of cost-cutting efforts.

The earnings reported Tuesday amounted to $2.43 a share in the April-June period compared with earnings of $477 million, or $1.03 a share, a year ago.

Revenue in the second quarter rose to $48.3 billion from $46.2 billion in the same period last year.

GM reported its global automotive operations earned $1.1 billion during the second quarter, compared with $410 million during the April-June period a year ago.

Income for its North American operations more than doubled to more than $1.2 billion from $521 million in the second quarter last year.

GM said its U.S. market share increased to 28.1 percent in the second quarter mainly due to sales increases in both cars and trucks. During the second quarter of 2001, GM's U.S. market share was 27.3 percent.

GM's European operations lost $115 million for the quarter versus a loss of $154 million in 2001.

The latest results include a $156 million quarterly loss for its Hughes Electronics subsidiary, which is being sold, and an after-tax charge of $55 million, or 10 cents per share, for costs associated with end-of-life vehicle recycling in Europe.

Excluding the recycling charge, GM earned $2.53 per share for the quarter.

A consensus of Wall Street analysts polled by Thomson Financial/First Call expected GM to earn $2.42 per share including the Hughes loss. Thomson was polling analysts to see if their estimates included the recycling charge.

In early trading on the New York Stock Exchange, GM shares were down $1.08, or 2.25 percent, at $46.84.

GM was the only domestic automaker to report an increase in June sales compared with June 2001. Sales were up 4.3 percent for the month, and down 2.3 percent for the first six months of the year excluding GM's Saab brand.

A major hurdle to selling its Hughes Electronics subsidiary to Littleton, Colo.-based EchoStar Communications Corp. was lifted last week when the Internal Revenue Service ruled the sale would be tax free.

GM had insisted that the spinoff be tax-free for federal income tax purposes in order for the transaction to occur.

In April, GM signed a $1.2 billion deal to acquire key components of South Korea's Daewoo Motor Co., gaining a long sought-after production foothold in Asia, one of the world's fast-growing markets.

Ford Motor Co. reports its second quarter financial results on Wednesday. DaimlerChrysler AG reports on Thursday.