GM earnings up 31% for quarter

North American, European sales lift No. 1 carmaker

Auto industry

April 16, 1999|By Ted Shelsby | Ted Shelsby,SUN STAFF

Thanks to a big boost from its North American operations and healthy auto sales in Europe, General Motors Corp. reported better-than-expected first-quarter earnings yesterday.

The world's largest automaker reported consolidated net income of $2.1 billion, or $3.10 a share, for the three months that ended March 31. That is up 31 percent from net income of $1.6 billion, or $2.31 per share, in the same quarter of last year.

Sales rose 6 percent to $42.4 billion from $40 billion in the first quarter of 1998.

On a fully diluted basis, earnings per share were equal to $3.04 a share, compared with $2.27 a year ago.

The results were higher than the $2.88 a share average estimate of analysts polled by First Call Corp.

Earnings of GM's North American operations, which account for about half of its automotive business, rose 67 percent to $1.41 billion from $841 million.

"The numbers were consistent with our expectations that North America would have a super-strong quarter," said Nicholas Lobaccaro, an auto analyst at Lehman Brothers. "Overseas results were a little better than we expected."

Net income from GM's European automotive business jumped 75 percent to $174 million. It reported a $25 million loss from its combined investments in Latin America, Africa and the Middle East. Its Asia Pacific operations reported a deficit of $60 million.

G. Richard Wagoner Jr., GM's president and chief operating officer said, the company's North America operations "benefited from excellent consumer acceptance of our new products," and reflected the company's continuing efforts to cut cost by increasing efficiency.

GM vehicle deliveries in the United States totaled 1.16 million cars and trucks in the first quarter, an increase from the 1.1 million units of the first quarter of 1998.

Despite the increase in sales, GM's share of the U.S. car and light-truck market dropped to 28.8 percent, from the 30.2 percent of the market it held in the year-ago period.

GM's stock fell $3.1875 to close at $86.5625.

Bloomberg News Service contributed to this article.

Pub Date: 4/16/99

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