GM Fourth-Quarter Earnings Fall

Wednesday, January 17th 2001, 12:00 am

By: News On 6

DETROIT (AP) â€” General Motors Corp.'s fourth-quarter earnings dropped sharply, reflecting softness in North American auto sales. But the results still beat Wall Street expectations.

The world's largest automaker earned $609 million, or $1.15 a share, before onetime items in the three-month period, compared to $1.3 billion, or $1.95 a share, excluding onetime items in the fourth quarter of 1999.

The results beat the $1.12-a-share consensus of Wall Street analysts surveyed by First Call/Thomson Financial.

In early trading on the New York Stock Exchange, GM was down 63 cents at $55.13 a share.

The latest results exclude special charges, including $939 million for GM's planned phaseout of the Oldsmobile brand and $713 million for capacity reduction in North American and European operations.

GM posted a gain of $1.13 billion from the sale of its Hughes satellite system to Boeing.

Including onetime items in both periods, GM earned $89 million versus $1.15 billion a year ago. The latest results amounted to a loss of $1.16 a share versus earnings of $1.86 a share, a year ago.

Revenues held steady at $46.3 billion, unchanged from last year's fourth-quarter.

``GM had another good year despite the extremely competitive global market and fourth-quarter slowdown'' in U.S. auto sales, GM Chairman Jack Smith Jr. said. ``As we enter a more challenging period, GM's taking tough actions to reduce structural costs, realign capacity and pursue growth opportunities to generate consistently strong results.''

GM's North American auto business lost $254 million in the fourth quarter â€” excluding special charges â€” compared with an adjusted $1.3 billion profit a year ago.

The news wasn't any better overseas. GM's European auto business lost $882 million for the quarter, compared to $30 million in profits in 1999's fourth quarter. The company's Asia Pacific division reported a $107 million loss, wider than a $23 million loss in the same quarter a year ago. And GM's Latin America/Africa/Mid-East business lost $16 million versus an $18 million profit a year ago.

GM said its Hughes Electronics arm earned $1 billion versus a $226 million loss a year ago that the automaker attributed to Hughes' expansion of its DirecTV satellite service.

Last month, GM said it would pare production in this year's first quarter by 15 percent, given poor sales and slackening demand. The move follows similar cuts by Ford Motor Co. and DaimlerChrysler AG's Chrysler side, as all three struggle to reduce inventories.

At that time, GM also slightly reduced its fourth-quarter production estimates, by 5,000 vehicles, to 1.37 million.

GM's sales of cars and light trucks rose 6.6 percent for October before falling off 8 percent for November and 18 percent a month later, with the December decline enough to push GM's sales for all of 2000 down 1 percent.

The automaker has attributed its sluggish fourth-quarter sales to various factors, including a slower market and ``payback'' for an aggressive loan incentive GM offered on several models in October to boost sales. GM said its December sales also had been hurt by severe weather and by a decision to cut fleet sales.

GM plans to trim its model lineup by up to 20 percent by 2004 as part of a series of moves aimed at cutting overhead costs as sales decline in the United States and Europe. The automaker has said it will cut up to 16 models from the 80 it sells in the United States, with several of those to be Oldsmobiles, a 103-year-old brand the company intends to kill off.

For the year, GM earned $4.45 billion, or $6.68 a share, down from $5.58 billion, or $9.18 a share, a year earlier.

Revenue for the year rose to $184.6 billion from $176.6 billion in 1999.