GM beats expectations for 2001 fourth quarter

Posted 9:14AM on Wednesday 16th January 2002 ( 23 years ago )

DETROIT - General Motors Corp. earned $255 million or 60 cents a share in the fourth quarter of 2001, beating Wall Street expectations, the automaker reported Wednesday. The company reported it earned $601 million for the full year, or $1.77 per share, including special items, compared with earnings of $4.5 billion or $6.68 per share during 2000. There were no special or one-time charges in the quarter. A consensus of financial analysts by Thomson Financial/First Call expected GM would post earnings of 59 cents a share for the fourth quarter and $3.20 a share for the full year, excluding special or one-time charges. During the fourth quarter in 2000, GM earned $89 million, including special charges, but lost $1.16 a share. The world's largest automaker reported its global automotive operations earned $708 million last year compared with $3.9 billion in 2000. Automotive operations earned $66 million in the fourth quarter compared with $393 million in the fourth quarter of 2000. The automaker blamed an 11 percent drop in sales volume and "strong pricing competition" in North America, and price pressure and a shift in consumer preference for smaller, less expensive vehicles in Europe as factors in the falloff. GMAC, the automaker's credit arm, posted record earnings for the third straight year, reporting earnings of $1.8 billion for 2001, an increase of 9.4 percent over 2000. In the fourth quarter, GMAC earned $435 million, up $26 million or more than 6 percent from the same three-month period in 2000. GM's Hughes Electronics subsidiary was a drag on the automaker's bottom line, posting a $525 million loss for the year, compared with a loss of $303 million in 2000. In the fourth quarter Hughes lost $131 million, compared with a $74 million loss in the last three months of 2000. GM is in the process of selling Hughes to EchoStar Communications Inc. The fourth quarter results represent a quick, three-month turnabout for the automaker, after it reported a 2001 third quarter loss of $368 million, or 41 cents a share. The automaker's fortunes turned after it kicked off an incentive war in the days following the Sept. 11 terror attacks with its "Keep America Rolling" program, offering no-interest financing on many of its vehicles. Ford Motor Co. and the Chrysler Group of DaimlerChrysler AG followed suit, sparking a late year sales binge that pushed 2001 to the second best in history with 17.1 million vehicles sold industrywide. GM set an ambitious full-year earnings target for 2002 of $3 a share, to be achieved through aggressive cost-cutting measures including job reductions and negotiating lower prices from suppliers, GM vice chairman and CFO John Devine said during a meeting between GM executives and financial analysts at the automaker's Detroit headquarters last week. The company is continuing plans to reduce its salaried work force by 10 percent each year -- about 4,700 jobs in 2002 -- through attrition and voluntary buyouts, Devine told financial analysts and reporters last week. The number of contract employees also would be reduced, said president of GM North America Gary Cowger. The 2002 target will be tough but realistic, and one the company is committed to reaching, Devine said. Thomson Financial/First Call estimates call for 2002 earnings of $1.93 a share. ------

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