GM's 4th-quarter profit surges to $2.03 a share Sales rise 21% to $48.4 billion

Auto industry

January 27, 1998|By Ted Shelsby | Ted Shelsby,SUN STAFF

General Motors Corp., capping a strong performance in North America, said yesterday that its fourth-quarter earnings more than doubled to $1.7 billion from $786 million in the strike-impaired year-ago period.

The world's largest automaker said it used a $4.3 billion gain in the quarter from the sale of its Hughes Electronics Corp. defense business to offset a $4 billion charge for plant closings and other write-offs.

Excluding such special items, GM earned $1.5 billion, or $2.03 a basic share, from operations in the quarter, up from $848 million, or $1 a share, a year ago.

"They did a little better than Wall Street expected," said David Healy, an auto analyst with Burnham Securities Inc. Analysts had projected earnings of $1.97 to $1.98 a share. Sales rose 21 percent to $48.4 billion for the three months ended Dec. 31, up from $40 billion a year ago.

GM's North American car and truck operations, which represent more than half its total business, reported income of $636 million in the quarter. That compared with a loss of $117 million in the same part of 1996 when the company suffered through a 20-day strike by the Canadian Auto Workers and walkouts by United Auto Workers.

R. Richard Wagoner Jr., president of the North American operations, credited some of the gains to new models. He said the Buick Park Avenue, Pontiac Grand Prix, Oldsmobile Intrigue and the new minivans are "significantly outselling" the models they replaced.

He said the company's full-size pickups and sport utility vehicles continue to sell well.

Delphi Automotive Systems, GM's parts-making division, earned $265 million in the quarter, up from $56 million in the 1996 quarter. Delphi normally produces parts for GM cars, but the vTC company said sales to other auto manufacturers accounted for 38 percent of its total sales last year.

The company's big trouble spot in the quarter was in its international operations. The division posted a fourth-quarter profit of $197 million, down 44 percent from a profit of $353 million in the like part of 1996.

Income from automotive operations in Europe totaled $31 million for the quarter just ended, down from $99 million a year ago.

GM attributed the decline to higher sales and marketing costs and reduced earnings from Saab's launch of a new model.

Overall, GM performance was good enough to result in the payment of profit-sharing checks of about $750 each for the 239,000 union-represented workers in the United States, including those at its Chevrolet Astro and GMC Safari van plant in Southeast Baltimore. In 1996, the profit-sharing payment amounted to $300.

Pub Date: 1/27/98

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