GM Hughes Reports a 44% Profit Gain in 1st Quarter

GM Hughes Electronics, General Motors’ aerospace and electronics subsidiary, reported a 44% increase Wednesday in first-quarter profit.

The earnings were $251.9 million, up from $175.2 million in the first quarter of 1987.

Revenue at the company, which is made up of Los Angeles-based Hughes Aircraft and Delco Electronics, was unchanged at $2.7 billion. The earnings jump was attributed to sale of part of Hughes’ stock holdings in Nippon Avionics Co. and to an accounting change at Delco.

GM Hughes Electronics, financing subsidiary General Motors Acceptance Corp., and Electronic Data Systems Corp. all report earnings separately from GM, which is scheduled to release its own first-quarter results today.

GMAC, the financial, insurance and mortgage unit, said net income was down 26% in the quarter ended March 31 because of a slimmer margin between the money it makes in interest and the cost of obtaining funds.

The subsidiary’s net income was $354.4 million, down from $481.4 million in the year-ago quarter. GMAC’s total earning assets were $94.7 billion, up 9% from a year earlier. The company’s average cost of borrowing rose to 7.94%, up from 7.67% in the first quarter of 1987.

Earnings jumped 38% at Electronic Data Systems Corp., GM’s Dallas-based computer and communications services company, on the strength of government and private data-processing contracts in the United States and Europe.

EDS had net income of $89.1 million on revenue of $1.12 billion, up from $64.6 million on revenue of $1.03 billion in the first quarter of 1987.