GM Reports Lower Profit, but Sales Rise 7%
General Motors Corp. on Tuesday said its third-quarter earnings fell 16% from a year ago, but a strong performance by its North American operations helped it beat Wall Street’s expectations.
The nation’s biggest auto maker earned $1.07 billion, or $1.35 a share, in the July-September period, compared with $1.27 billion, or $1.57, a year ago. The average estimate of analysts was $1.21.
GM’s sales were $37.1 billion, up 7% from $34.6 billion in the same quarter a year ago.
GM Chairman Jack Smith said GM’s North American earnings of $423 million marked its best third quarter ever.
GM said earnings a year ago were inflated by $253 million, or 34 cents, from a reduction in GM’s plant closing reserve. If not for that boost, the latest earnings would have been higher than those in 1996, GM said.
GM shares fell $1.06 to close at $70.38 on the New York Stock Exchange.
GM’s report comes after Chrysler Corp. on Friday said its third-quarter earnings fell 35% from a year ago.
Ford Motor Co. is scheduled to report its earnings today.
Burdened by a film-price war with Japanese nemesis Fuji Photo Co. while it struggles to make money from digital photography, Eastman Kodak Co. said third-quarter profit plunged 43%.
The world’s biggest imaging company earned $232 million, or 71 cents a share, in the July-September quarter, down from $410 million, or $1.22 cents, a year ago. The dollar’s strength abroad trimmed 20 cents off each share.
Excluding a one-time charge of $46 million, or 9 cents, the results lined up with many analysts’ forecasts.
At a Glance:
Ameritech Corp. posted record income in the third quarter, while Sprint Corp. said its net income was down despite record results in its long-distance operations.
Ameritech, the Chicago-based holding company for telephone companies in five Midwestern states, reported third-quarter income of $613 million, or $1.12 a share, on sales of $4.0 billion. A year earlier, Ameritech earned $519 million, or 94 cents.
Sprint, the nation’s third-largest long-distance carrier, said its third-quarter income was down 32%. Sprint said it earned $212 million, or 49 cents a share, down from earnings of $312 million, or 72 cents, in the year-earlier period. The earnings were short of the 51 cents that analysts had anticipated.
The booming stock market and global merger frenzy fattened the wallets of Wall Street securities firms during the July-September quarter, as several more brokerages posted healthy earnings.
Merrill Lynch & Co. earned $494 million, or $1.25 per share, in the third quarter, compared with $331 million, or 84 cents, in the same period a year ago. Bear Stearns Cos. earned $161.6 million, or $1.11 per share, in its first fiscal quarter, compared with $108.8 million, or 72 cents, a year ago. PaineWebber Group said its profit rose to a record $112.8 million, or $1.11 per share, compared with $80.2 million, or 79 cents, during the year-ago period.
NationsBank Corp. and other big banks reported third-quarter earnings gains in line with Wall Street forecasts, boosted by fees for customer accounts and other services and higher interest income. NationsBank, the nation’s fifth-largest bank, said its earnings jumped 26% to $788 million, from $625 million a year earlier. First Chicago NBD Corp., the No. 9 bank, said profit rose 7% and net income rose to a record $385 million, or $1.26 a share, in the quarter, from $358 million, or $1.09, a year earlier.
Atlanta-based Suntrust Banks Inc. said earnings rose to $169 million, or 80 cents a share, from $156 million, or 70 cents, in the 1996 quarter. National City, based in Cleveland, said earnings rose to $204 million, or 93 cents a share, from $186 million, or 82 cents, a year earlier.
H.F. Ahmanson & Co., the parent of the Home Savings of America thrift, said third-quarter earnings rose 30%, partly a result of the company’s aggressive stock repurchase program. Earnings rose to $95.5 million, or 84 cents per share, compared with $73.2 million, or 56 cents a year ago.
Santa Monica Bank reported third-quarter net income of $2.4 million, or 33 cents a share, compared with $2.6 million, or 37 cents, a year ago.
ITT Corp. said its third-quarter earnings rose a better-than-expected 22% to $83 million, or 69 cents a share, from $68 million, or 58 cents, a year earlier.
Pfizer Inc. and Johnson & Johnson posted healthy third-quarter earnings. Pfizer reported profit of $596 million, or 46 cents a share, 15% higher than its earnings of $514 million, or 40 cents, last year. J&J; reported third-quarter earnings of $855 million, or 64 cents a share, a 14% gain on the year-ago earnings of $750 million, or 56 cents.
Coca-Cola Enterprises Inc. said its third-quarter earnings rose 46% to $54 million, or 14 cents a share, up from $37 million, or 10 cents, a year-earlier.
Honeywell Inc. said its third-quarter earnings rose nearly 18% to $118.9 million, or 93 cents a share, a penny higher than estimates, from $101.1 million, or 80 cents. Sales increased 13% to $2.04 billion from $1.80 billion.
Enron Corp. reported slightly higher third-quarter profit of $134 million, or 44 cents a share, compared with profit of $123 million, or 48 cents, a year earlier.
