First Quarter Estimates
General Motors Corp
25 February 2002
Contact: Jerry Dubrowski
(212) 418-6261
Toni Simonetti
(212) 418-6380
Mark Tanner
(313) 665-3146
GM INCREASES EARNINGS, PRODUCTION ESTIMATES;
DISCUSSES PLAN TO STRENGTHEN BALANCE SHEET
DETROIT - General Motors Corporation (NYSE: GM, GMH) today raised its estimates
for 2002 first quarter and calendar-year earnings and production schedules,
reflecting better-than-expected industry sales in the U.S. and strong retail
sales of GM vehicles.
GM Vice Chairman and Chief Financial Officer John Devine said the revised
outlook comes as GM is taking steps to strengthen its balance sheet by $10
billion in 2002 through a combination of improved cash flow, dividends from GMAC
stemming from its anticipated earnings strength, proceeds from the proposed
split-off and merger of Hughes, and public offerings.
The proceeds of the cash-generation initiatives will be used to rebuild GM's
liquidity position, reduce its underfunded pension liability, and fund its post-
retirement health care obligations.
'Our revised expectations reflect the increased optimism we have about our near-
term performance, and the confidence we have about the future,' Devine said. 'We
can strengthen the balance sheet by capitalizing on the momentum we're creating
in market share, quality, productivity, and new product offerings, including the
Saturn Vue and Cadillac CTS.'
Devine noted that the long-term outlook for GM is increasingly positive. 'It is
reasonable to expect that GM could generate $10 per share in earnings by the
middle of the decade,' he said, adding GM expects to achieve this earnings
target through a combination of aggressive cost-cutting, improved volume and mix
in North America, improved earnings in Europe, Asia and Latin America and solid
financial performance from GMAC.
GM's current outlook for first quarter earnings per share is now $1.20,
excluding Hughes and any special charge related to GM's restructuring of its
European operations under its Project Olympia. Previously, GM's estimate for the
first quarter, excluding Hughes and any European restructuring charge, was $1.00
per share.
GM's revised estimate for calendar year 2002 is now $3.50 per share, excluding
Hughes and any European restructuring charge. The increase of $0.50 per share
from the previous estimate is mostly attributable to expected increases in
production volume to meet better-than-expected retail vehicle demand in the U.S.
GM is increasingly optimistic about the U.S. industry outlook and now expects
total U.S. industry sales of approximately 16 million vehicles for the year.
As a result of the stronger industry sales outlook and GM's performance in the
retail market, GM is increasing its first quarter North American production
estimate by 20,000 vehicles, to 1,340,000 units. This revised estimate is 10
percent above last year's first quarter production of 1,214,000 vehicles.
For the second quarter of 2002, GM estimates that its North American production
will be approximately 1,425,000 units (605,000 cars and 820,000 trucks), up over
4 percent from 1,364,000 units last year. GM's North American production for the
first half of 2002 will be up 187,000 units, or 7 percent compared to last year.
For the full year, GM expects to produce more than 5.1 million vehicles in North
America, up more than 100,000 units from the company's estimate in January.
Other Advanced Disclosures
GM today also filed a Form 8-K to update certain information regularly made
available in the company's annual and quarterly SEC filings. The complete Form
10-K is expected to be filed at the SEC in early March. Included in today's
disclosure is information on: GM's strategic alliance with Fiat S.p.A., the
pending split-off of Hughes Electronics Corp. so that it can merge with EchoStar
Communications Corp., and GM's use of special purpose entities. The complete
Form 8-K is available at the SEC and on GM's web site at the following location:
(http://media.gm.com/news/add_docs/sec1.doc).
Advisory for Analyst/Media teleconference
A live webcast relating to this announcement is scheduled for approximately
12:15 p.m. EST today. The webcast will be available through a hot link in GM
Media Online (http://media.gm.com), or directly at http://investor.gm.com under
Recent Webcasts in the Webcasts and Presentations section. A replay of the
webcast will also be available on the site following the event.
Additionally, news media may listen to the webcast via telephone. To access the
call on a listen-only basis, please dial 888-754-3420 (international callers:
212-896-6120) about 10 minutes prior to the start time and ask to be connected
to the General Motors conference call.
A replay of this presentation will be available via telephone from approximately
2:00 p.m. EST today until Feb. 27, 2002, at 2:00 p.m. EST. The dial-in number
for the replay is 800-633-8284 (858-812-6440 for international access). Please
enter reservation number 20385967 for the replay.
In this press release and related comments by General Motors management, our use
of the words 'outlook,' 'expect,' 'anticipate,' 'estimate,' 'forecast,'
'project,' 'likely,' 'objective,' 'plan,' 'designed,' 'goal' 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-10,11) 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 or interruptions in transportation
systems, 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.
This information is provided by RNS
The company news service from the London Stock Exchange
Latest directors dealings
- 14 minutes ago CC Japan Income & Growth Trust
- 36 minutes ago 3i Infrastructure
- 42 minutes ago QinetiQ Group
- 1 hour ago JPMorgan Emerging Markets Growth & Income plc
- 1 hour ago National Grid