General Motors Corp. on Tuesday reported better-than-expected first-quarter earnings on record results from its finance wing and improved results from its Asian automotive operations, and raised it earnings outlook for the year.
GM, the world's largest automaker, reported first-quarter net earnings of $1.28 billion, or $2.25 per share, versus a profit of $1.48 billion, or $2.71 per share, in the previous first quarter, which included a $505 million one-time gain.
Excluding 90 cents per share gain from the year-ago sale of GM Defense, GM earnings rose, led by another quarter of record results from finance unit General Motors Acceptance Corp. and improved results from GM's Asia-Pacific automotive operations.
The results topped both GM and Wall Street forecasts. GM said in January that it expected first-quarter earnings of $1.75 per share, excluding special items.
Analysts had expected GM to post per-share earnings of between $1.69 and $2.00, with a consensus of $1.78 in the quarter, according to Reuters Research, a unit of Reuters Plc.
GM's U.S. and European automotive operations both reported weaker results due to cuts in vehicle production. Even though GM's U.S. car and truck sales rose in the first quarter, the automaker cut its North American production by 7 percent as automaker inventories of unsold vehicles mounted.
Vehicle production directly impacts earnings because automakers count revenue from new vehicles when they are built rather than when they are sold by dealerships.
GM and the rest of the automotive industry have spent progressively more on incentives over the past year. GM spent an average of $4,266 per vehicle sold in the United States in March, up from $2,915 per vehicle in March last year, according to Autodata.
GM raised its earnings outlook for the year to reflect the stronger first-quarter results, the strengthening U.S. market, positive results from its finance unit and the Asian region and a lower corporate tax rate.
GM now sees 2004 earnings of about $7.00 per share, excluding special items and at current share dilution levels, compared with a previous range of $6.00 to $6.50 per share.
