- The Washington Times - Thursday, January 16, 2003

DETROIT, Jan. 16 (UPI) — General Motors Corp., the world's largest automaker, said Thursday its fourth-quarter net income surged to $1 billion, or $1.71 a share, from $255 million, or 60 cents a share during the same period a year earlier.

The automaker said its revenues climbed to a record $48.7 billion from $46 billion a year ago.

GM in October said it expected to post fourth-quarter earnings of about $1.40 a share. Analysts on Wall Street had expected GM to post a net income of $1.53 a share, according to Thomson First Call.

For all of 2002 GM said it earned $1.7 billion, or $3.35 a share on record revenue of $186.8 billion, compared with $601 million, or $1.77 a share in 2001.

Excluding special items, 2002 earnings totaled $3.9 billion, or $6.98 a share, nearly double the results in 2001 when GM earned $2 billion, or $3.60 a share.

Excluding special items, earnings in the fourth quarter of 2002 totaled $934 million, or $1.67 a share, more than double the $386 million, or 69 cents a share, earned in the prior-year period.

"Our strategy to leverage GM's size, and fundamentally improve its operating efficiency continues to pay off," said GM Chairman Jack Smith.

"We're a far leaner, more flexible company, offering cars and trucks that are winners in the marketplace, which continues to drive our improved earnings," Smith said.

"GM delivered strong results despite challenging global economic and market conditions," said President and Chief Executive Officer Rick Wagoner.

"Strong launches of well-received products, aggressive marketing, improved quality and productivity, and continued cost reductions were the primary drivers of our improved performance. Our performance in 2002 gives us confidence in the strength of our fundamental operating systems, and is an excellent foundation on which we can build.

"General Motors Acceptance Corp., or GMAC, achieved its eighth-consecutive year of earnings growth and fourth straight year of record earnings — truly an outstanding performance, which was achieved despite considerable challenges in the capital markets," Wagoner said.

GM said its automotive operations generated approximately $8 billion in cash flow, as total cash generation was about $12 billion in 2002, exceeding the target of $10 billion.

"We generated significantly more cash than expected," Wagoner said. "This was achieved despite the fact that the Hughes transaction, which had been a major element of our cash-generation plan, could not be completed. And, we still have a significant store of value in Hughes that we can capitalize on going forward."

GM said the strong cash performance allowed the automaker to contribute a total of $4.8 billion to its U.S. pension plans during the year, including a $2.6 billion cash contribution in the fourth quarter.

In addition, GM made a $1 billion cash contribution to the long-term Voluntary Employees' Beneficiary Association Trust in June of 2002. Even with these contributions, net liquidity of $2.3 billion at year-end 2002 was up $1.3 billion from year-end 2001.

GM said its global automotive operations earned $563 million in the fourth quarter, compared with $66 million in the prior-year period. The increase was fueled by income growth at GM North America and Asia Pacific, and moderating losses in Europe and Latin America. For 2002, GMNA earned $3 billion, double its 2001 performance.

GM also said its U.S. market share increased to 28.3 percent for the year, up 0.2 percentage points from 2001.

Looking ahead, the automaker said it expects moderate economic growth in 2003 in the United States, resulting in total U.S. industry vehicle sales of approximately 16.5 million units.

In Europe, total industry vehicle sales are expected to be about 19 million units. GM's 2003 first-quarter production forecast for North America is estimated at 1.43 million units, up nearly 6 percent from the first quarter of 2002.

GM also estimates that earnings in the first quarter of 2003 will be approximately $1.50 a share, and the calendar-year earnings target is approximately $5 per share, excluding Hughes and any special items.

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