Earnings Outlook
GM Affirms Earnings Outlook for Second Quarter and Calendar Year
-- Great Products, Productivity And Quality Gains Cited
-- North America On-Track, Europe More Challenging Than Expected
-- GMAC Performance Continues To Build
DETROIT, June 14 -- General Motors Corp. (NYSE: GM) said
today the outlook for the global auto industry remains strong and the company
is on-track to meet its second-quarter and 2004-calendar-year financial
targets.
At an annual meeting with securities analysts and investors, GM Chairman
and Chief Executive Officer Rick Wagoner said, 'GM expects record global
industry sales of more than 61 million units in 2004. Our strong products,
quality and productivity improvements, aggressive marketing, technological
advances in design and manufacturing, and a strong commitment to innovation
and technology are key to capitalizing on the expanding market.'
'GM is on-track to meet its 2004 targets of $2.00 to $2.25 earnings per
share in the second quarter this year, and $7.00 per share for the calendar
year, excluding special items,' said GM Vice Chairman and Chief Financial
officer John Devine. 'Longer term, we continue to work toward our goal of
achieving earnings of $10.00 per share by 2006.'
GM's financial-services subsidiary, General Motors Acceptance Corp.
(GMAC), continues to be a strong contributor to GM's financial performance.
'GMAC is exceeding expectations and is confident it will surpass its target of
$2 billion net income for 2004 by a wide margin,' Devine said.
GM North America is on-track to hit its earnings target of $1 billion to
$1.4 billion this year, despite a continuing tough competitive environment.
GM Asia Pacific (GMAP) is showing continued strength and is on-track to earn
between $700 million and $800 million. In the Latin America/Africa/Mid-East
(GMLAAM) region, the outlook is encouraging and GM expects to reduce losses
further and beat the targeted range of ($200) million to ($100) million. The
turnaround at GM Europe (GME) has proven more difficult than anticipated, and
GME is expected to be in a loss position for the 2004-calendar year, largely
because of lower-than-projected revenue growth.
Other financial priorities are on-track, as GM expects to generate $5
billion in operating cash flow, reduce structural costs in automotive
operations by more than $500 million, reduce material costs in North America
by 3.5 percent and by 3.0 percent in Europe, and hold capital spending to $7
billion.
The outlook for U.S. industry sales for 2004 is approximately 17.2
million, with total North American sales of about 20.2 million. The
projection for Europe is also approximately 20.2 million units. Industry
sales in Asia Pacific are expected to total about 17.0 million units, while
sales in Latin America, Africa and the Mid-East should reach approximately 3.8
million.
General Motors is focused on continuing its 73-year history of global
automotive leadership with great design, quality, reliability and durability
of every product. Initial acceptance is excellent for the new Opel/Vauxhall
Astra, which will be sold in 27 countries in Western and Central Europe. In
North America, the focus on design leadership is demonstrated by the new
generation of Cadillacs, the new Corvette, the Buick LaCrosse and the Pontiac
G6. GM and its joint ventures in China plan to broaden product offerings in
that rapidly expanding market, and product strength in Latin America has led
to continued market-share gains.
The company's commitment to leadership in powertrain technology is paying
off with cars and trucks that offer excellent performance while at the same
time making significant gains in fuel efficiency and emission reductions.
'We are improving the performance and efficiency of our current
powertrains with displacement-on-demand technology and advanced valvetrain
controls for gasoline engines, enhancements in diesel engines for cars and
trucks, and sophisticated electronic engine and transmission controls,'
Wagoner said. 'We are developing the broadest portfolio of hybrid systems in
the industry, and we are an industry leader in fuel-cell development, all of
which we believe provides GM with long-term competitive advantages.'
Winning vehicle designs and performance characteristics are complemented
by popular options such as OnStar, the leading provider of in-vehicle safety,
security and information services, and XM satellite radio, which will be
offered on more than 50 U.S. cars and trucks in the 2005 model year.
GM is leveraging its global skills, capabilities, and technical resources
to efficiently produce vehicles targeted to meet consumer needs in various
local markets throughout the world. 'We are pushing hard to achieve market-
share growth in all regions and to strengthen our foundation for future
growth,' Wagoner said. 'Our focus is crystal-clear, our progress is steady,
and our commitment to leadership is unwavering'
In this press release and related comments by General Motors management,
our use of the words 'expect,' 'anticipate,' 'estimate,' 'project,'
'forecast,' 'outlook,' 'target,' 'objective,' 'plan,' 'goal,' 'pursue,' 'on-
track,' and similar expressions is intended to identify forward-looking
statements. While these statements represent our current judgment on what the
future may hold, and we believe these judgments are reasonable, actual results
may differ materially due to numerous important factors that are described in
GM's most recent report on SEC Form 10-K (at page II-20) which may be revised
or supplemented in subsequent reports on SEC Forms 10-Q and 8-K. Such factors
include, among others, the following: changes in economic conditions;
currency-exchange rates or political stability; shortages of fuel, labor
strikes or work stoppages; market acceptance of the corporation's new
products; significant changes in the competitive environment; changes in laws,
regulations and tax rates; and, the ability of the corporation to achieve
reductions in cost and employment levels to realize production efficiencies
and implement capital expenditures at levels and times planned by management.
SOURCE General Motors Corporation
-0- 06/14/2004 P
/NOTE TO EDITORS: For additional media information, visit
http://media.gm.com ./
/CONTACT: Mark Tanner, +1-313-665-3146, mark.tanner@gm.com , or Jerry
Dubrowski, +1-212-418-6261, jerry.dubrowski@gm.com , both of General Motors
Corporation/
/Web site: http://media.gm.com
http://www.gm.com /
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