said first-quarter earnings rose both before and after a big asset sale, almost entirely because of mortgage lending at its finance unit. With market share slipping, however, the company dropped full-year guidance, saying economic uncertainty made to difficult to predict what will happen in the second half.
The No. 1 automaker earned $1.5 billion, or $2.71 a share, in the latest quarter, up from $288 million, or 57 cents a share, a year ago. Much of the increase was attributable to a gain from the sale of its GM Defense unit. Before various items in both periods, the company earned $1 billion, or $1.84 a share, compared with $791 million, or $1.39 a share, last year. Automotive and financing revenue rose about 5%.
"While market conditions were admittedly challenging, market share performance in North America did not meet our expectations," GM said. "We are launching new products in key, high-volume segments of the market to improve our competitiveness, and we expect to remain aggressive in the marketplace."
The company's global automotive operations earned $548 million in the latest quarter, down from $654 million a year ago. Market share slipped to 26.6% from 28.2% last year.
The company's finance arm, GMAC, earned $699 million, up almost 60% from $439 million last year. Earnings from mortgage lending more than doubled to $371 million.
For all of 2003, the company expects moderate economic growth and industrywide vehicle sales in the low to mid-16 million unit range.
Despite "considerable economic uncertainty and increasing price and volume pressure," GM expects second quarter earnings of at least $1 per share, excluding Hughes and any special items. It also expects to be profitable in both the third and fourth quarters of 2003.
"However, GM is now less certain of its ability to achieve its prior 2003 calendar-year guidance of $5 earnings per share, given the uncertain economic conditions around the globe," it said. "In light of these circumstances, GM is not providing any specific update to its calendar-year earnings guidance at this time."