April 17, 2002
GM reports improved first quarter earnings
Detroit – GM today reported that it earned $791 million, or $1.39 diluted earnings per share of GM $1-2/3 par value common stock, on revenue of $44.3 billion in the first quarter of 2002, excluding special items and Hughes. That compares with $321 million, or $0.57 per share, on revenue of $40.7 billion in the first quarter of 2001, also excluding special items and Hughes.
GM attributes the increase to strong vehicle sales and improved product mix in North America and a continued focus on cost reduction.
Including special items and Hughes, GM’s first-quarter 2002 reported net income totaled $228 million, or $0.57 per share on revenue of $46.3 billion. First-quarter-2002 results included a restructuring charge of $407 million after-tax, or $0.72 per share, related to improving the competitiveness of GM’s automotive operations in Europe.
“We are encouraged by the first-quarter performance at GM North America and GMAC,” said GM Chairman Jack Smith. “We continue to focus on great products and improving our competitiveness. Momentum is on our side and we plan to build on our success.”
“Strong vehicle sales in North America coupled with cost reductions drove our profit improvements,” said Rick Wagoner, president and chief executive officer. “The quality of our market share keeps improving with a richer mix of more-profitable vehicles and a higher percentage of retail sales.”
GM’s global automotive operations earned $467 million in the first quarter of 2002, compared with $20 million in the prior- year period. Global production increased approximately 3.7 percent in the first quarter, compared with the same period in 2001. Strong performance in North America was partially offset by GM’s European operations, which have not yet realized full benefit from the current restructuring.
“The competitive landscape continues to be very challenging in all regions, but our improving results show that we are on the right course,” Wagoner said. “We intend to continue our steady drumbeat of innovative new products around the globe to build upon our momentum in the marketplace.”
GM North America (GMNA) posted a substantial increase in income, earning $625 million in the first quarter of 2002, compared with $120 million in the first quarter of 2001. Production volume increased 11.4 percent, with trucks growing to about 56 percent of total production, compared with about 52 percent in the first quarter of 2001. GM’s overall U.S. market share was relatively stable at 28.3 percent in the quarter, however higher-profit retail sales increased significantly. GM estimates that its retail vehicle share increased about 1 percentage point, driven by a 4 percentage- point jump in truck retail share.
As a result of stronger-than-expected U.S. industry sales in the first quarter and improving economic indicators, General Motors is now forecasting total U.S. industry vehicle sales to be approximately 16.5 million units in 2002. GM’s U.S. dealer inventories remain lean at approximately 1 million units, and second-quarter North American production is expected to increase approximately 10 percent over the second quarter of 2001, to approximately 1.5 million units. Production for the calendar- year is expected to increase about 6 percent to more than 5.4 million units. For the second quarter of 2002, GM estimates its earnings excluding Hughes, at $2.00 per share. Calendar-year- 2002 earnings are now expected to be approximately $5.00 per share, compared with prior guidance of $3.50 per share. Including Hughes, the targets are approximately $1.90 per share for the second quarter, and $4.60 per share for the calendar year.
Ford Motor Company will announce it’s first quarter financial results today.