GM Roars Back With a Record 4th Quarter

DETROIT — General Motors Corp. turned in stronger-than-expected results in its North American automotive operations, enabling the world’s largest auto maker to post a record fourth-quarter profit of $1.8 billion.

Analysts said Wednesday’s report indicates that the industry’s long-lumbering giant is finally awakening after years of struggle involving restructuring, labor unrest marked by costly strikes in 1998, cost cutting and overhauling its vast line of cars and trucks.

“The new GM’s earnings power is just starting to show now that they have some hot new products and have overhauled the cost structure,” said analyst Scott Merlis of Wasserstein Perella Securities Inc. “A much healthier GM is emerging from the one we once knew.”

David Healy of Burnham Securities said “dynamite” results in North America offset weakness overseas, still struggling with economic slowdowns.

“The new pickup trucks were a big help in the quarter,” Healy said, referring to the Chevrolet Silverado and GMC Sierra models, which cost less to manufacture than their older versions.

Analysts said they are reevaluating their 1999 earnings estimates for GM in light of the fourth-quarter results.

GM shares hit a 52-week high of $92 a share before closing up 94 cents at $88.94 on the New York Stock Exchange.

The auto maker’s October-to-December profit equaled $2.61 a fully diluted share, compared with $1.6 billion, or $2.33 a share, a year ago. Revenue totaled $46.4 billion, compared with $42.9 billion in 1997.

GM’s earnings were reduced by after-tax charges totaling $420 million to cover the costs of an employee-separation program and under-performing assets overseas.

Excluding those special items, GM’s fourth-quarter profit would have totaled $2.2 billion, or $3.25 a share. Wall Street analysts surveyed by First Call Corp. had expected fully diluted per-share earnings of $2.65 on an operating basis.

For the year, GM had less to cheer about. Last summer’s strikes left it with a profit of $3 billion, or $4.18 a share, down from $6.3 billion, or $8.62 a share, in 1997. Revenue for the year fell to $161 billion from $167 billion.

Ford Motor Co., the world’s No. 2 auto maker, is expected to report improved earnings today. DaimlerChrysler has said it will release year-end results in February or March.