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Mix-Ansicht- GM: Earnings - JüKü, 12.10.2000, 15:10
GM: Earnings
DETROIT, Oct 11 - General Motors Corp. said on Thursday that third quarter net earnings fell 5.5 percent to $829 million, due in part to a loss of $181 million from its European operations.
However, the world's largest automaker said earnings per share rose to $1.55, due mostly to ongoing stock repurchases, from $1.33 in the year-earlier period. The latest result compares with a consensus forecast of $1.54 by analysts surveyed by First Call/Thomson Financial.
Revenues fell to $42.61 billion from $42.79 billion a year earlier.
GM in the year-ago third quarter had net earnings of $877 million. Earnings from the latest quarter include worldwide automotive operations, which fell to $568 million from $613 million.
The $181 million loss in Europe offset a rise in North American automotive profits to $728 million from $671 million, where higher incentives and marketing costs were more than offset by improvements in material and manufacturing costs and slipping market share.
"These results reinforce the need to step up our efforts to eliminate waste and lower costs," said GM Chief Executive Officer G. Richard Wagoner."The industry continues to venture into new territory -- near-record demand mixed with unprecedented price pressures and intensely strong competition on all fronts."
Shares of GM, which reported its earnings before the market opened, closed on Wednesday at $58-3/8 on the New York Stock Exchange.
Losses mounted from GM's European automotive operations, down from a profit of $32 million last year, due to the launch of the new Opel/Vauxhaul Corsa, GM's highest volume vehicle. The start-up of the Corsa contributed to slowing sales from Germany, a critical market for Opel, and competitive industry prices.
"The loss in Europe is huge," he said."That looks pretty nasty," UBS Warburg analyst Saul Rubin.
A brutal pricing war in the United Kingdom, which the industry often refers to as"Treasure Island" because of its normally favorable results, also hurt European results, Rubin said. Transaction prices in the U.K. are down 10-15 percent from last year, he said.
"It looks like Treasure Island is being looted," he added.
GM's Asia-Pacific automotive operations reported a loss of $10 million down from a loss of $54 million a year earlier. The modest loss was mostly due to the start-up of a new plant in Thailand.
The Latin America/Africa/Mideast automotive operations reported a profit of $31 million for the third quarter versus year-earlier loss of $36 million.
GM's finance unit General Motors Acceptance Corp. (GMAC) reported record earnings of $401 million, up from $393 million in the year ago period.
Losses from GM's Hughes Electronics Corp. unit rose to $88 million from a loss of $30 million in the year-earlier period.
GM Vice Chairman Harry Pearce reiterated on Thursday that GM is considering separating Hughes from GM."Due to rapid consolidation in the media and telecommunications industries, GM is now considering alternative strategic transactions involving Hughes and other participants in those industries. Any such transaction might involve the separation of Hughes from General Motors," he said in a statement.
Ford Motor Co. <F.N> is scheduled to release its third-quarter results on Oct. 18. The No. 2 automaker is expected to post weaker results due to the ridgestone/Firestone tire recall. DaimlerChrysler AG will announce its numbers on Oct. 26.
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