General Motors Corp. Earns $901 Million in the Second Quarter, Down From $1.3 Billion a Year Ago

DETROIT July 17, 2003; John Porretto writing for the AP reported that General Motors Corp. earned $901 million in the second quarter, down from $1.3 billion a year ago in better economic conditions, but the world's largest automaker's results handily topped Wall Street predictions. Sharply lower volume year-to-year and continued pricing pressure eroded the company's financial performance.

GM said Thursday it earned $1.58 a share in the April-June period, compared with $2.43 cents in the second quarter last year.

The Wall Street consensus for earnings in the second quarter was $1.19 a share.

Excluding GM's Hughes Electronics Corp. subsidiary, GM earned $879 million, or $1.57 a share. That's down from $1.5 billion, or $2.63 a share, in the year-ago quarter, when the company had a one-time expense of $55 million.

GM, like others in the industry, has seen profits decline because of costly consumer incentives used to spur sales.

"Overall, we had reasonable financial results in a challenging global economic environment," chairman and chief executive Rick Wagoner said in a statement. "These results clearly demonstrate the benefits of our global portfolio of businesses, ranging from our core automotive operations ... to vehicle financing and mortgage operations."

Total revenue was $48.3 billion, essentially unchanged from a year ago.

GM's global automotive operations dropped dramatically. Earnings fell from $1.1 billion a year ago to $140 million in the most recent quarter. Global production declined 6.6 percent in the second quarter.

In North America, GM earned $83 million, compared with $1.3 billion in the year-ago period. Through June, GM's U.S. auto sales were off 5 percent from a year ago.

GM's U.S. market share was 27.9 percent in the second quarter, down from 28.1 percent last year. But the second-quarter figure was up from 26.6 percent in the first quarter.

"We're working hard to improve financial results in North America," Wagoner said. "We're going to stay focused on the straightforward business strategy that's worked very well for us in recent times."

GM Europe narrowed its loss to $3 million from $115 million a year ago. GM Asia Pacific earned a record $163 million in the April-June period -- four times better than the year-ago result.

GMAC, GM's finance arm, earned $834 million -- its best-ever quarterly performance.

Hughes Electronics earned $22 million, compared with a loss of $156 million in the prior-year period, led by strong results from DirecTV.

GM said last month its full-year profit target of $5 a share was uncertain because of questions about the economy. On Thursday, the automaker said it was more optimistic about the outlook for the remainder of the year. GM said full-year earnings could range from current analysts' estimates of $4.50 to $5 a share, excluding Hughes and any special items.

For the first six months of the year, GM earned $2.4 billion, or $4.29 a share, compared with $1.5 billion, or $3.02 a share. The figures include Hughes and special items.

Total revenue for the first six months of 2003 was $97.7 billion, up from $94.6 billion a year ago.