General Motors Corp. said Thursday that its quarterly earnings quadrupled because of strong U.S. sales of its highly profitable sport utility vehicles and pickup trucks, driven by heavy consumer incentives.
The world's largest automaker said its fourth-quarter net income, including one-time items, rose to $1.02 billion, or $1.71 a share, from $255 million, or 60 cents, a year earlier.
Some of the gains came from GM's North American automotive operations, where profit rose to $633 million from $392 million in the year-ago quarter, despite costly incentives.
Those incentives, which according to research firm Autodata climbed by about 80% year-over-year to about $3,370 a vehicle in December, led to North American earnings that failed to meet expectations, said Rod Lache, an analyst with Deutsche Bank.
Detroit's relentless price war, fueled by GM's aggressive discounting to try to boost its U.S. market share, caused the net price that consumers pay for new cars and trucks to fall 3.2% in the fourth quarter.
Analysts expect GM's North American earnings to drop in 2003 because of mounting pension costs, forecasts for falling U.S. sales and downward pressure on prices.
In 2002, GM earned $6.98 a share, excluding one-time items and its Hughes Electronics Corp. unit. GM hopes to sell or spin off Hughes by mid-decade.
GM shares fell 47 cents to close at $39.73 on the New York Stock Exchange.
The stock has risen 28% since reaching a multiyear low of $31.01 on Oct. 9.