GM Earns $1.34 Billion in Second Quarter

Wednesday, July 21st 2004, 10:01 am
By: News On 6

DETROIT (AP) _ General Motors Corp.'s second-quarter profit rose 49 percent, boosted largely by record earnings at its financial services arm but offset by continued losses on the automotive side in Europe.

Its global and North American market share declined.

The world's largest automaker said Wednesday it earned $1.34 billion, or $2.36 a share, in the April-June quarter, up from $901 million, or $1.58 a share, a year ago.

The Wall Street consensus for earnings in the most recent quarter was $2.24 a share, according to a survey by Thomson First Call.

Revenue rose 7.1 percent to $49.1 billion from $45.9 billion a year ago.

``Overall, our financial results for the quarter were reasonably good,'' Rick Wagoner, GM's chairman and chief executive, said in a statement. ``General Motors Acceptance Corp. once again had an outstanding quarter ... and our automotive operations reported improved earnings as well.''

GMAC earned a record $860 million in the second quarter, up from $834 million in the year-ago period.

Worldwide, GM's automotive earnings totaled $529 million in the most recent period, up from $140 million a year ago, reflecting improved results in North America, Asia Pacific and the Latin America/Africa/Middle East regions.

But the automaker's loss widened in Europe, a trouble spot for the company in recent quarters.

GM said its global market share fell to 14.7 percent in the quarter from 14.9 percent in the prior-year period.

GM North America earned $328 million in the second quarter versus $83 million a year ago. Improvements in material costs and pricing more than offset higher recall costs.

GM said its North American market share was 26.2 in the quarter, down from 27.2 last year.

In Europe, GM had a loss of $45 million, compared with a loss of $3 million a year ago. The most recent quarter's results reflect intense price competition, foreign exchange losses and continued restructuring costs for GM's share of a joint venture with Fiat.

``Despite growing market share (in Europe), we're not getting the revenue growth we had hoped for, particularly in the traditionally large western European markets,'' Wagoner said.

GM Asia Pacific earned $236 million in the quarter, up from $163 million a year ago. The automaker's Latin America/Africa/Mid-East operation earned $10 million, a significant improvement from a loss of $103 million in the prior-year period.

For the first half of 2004, GM earned $2.6 billion, or $4.61 a share, versus $2.4 billion, or $4.29 a share, a year ago.

GM maintained its 2004 earnings estimate of approximately $7 a share. The current Wall Street estimate is $7.12.