FOR RELEASE: October 12, 2000 CONTACT: Mark A. Tanner PHONE: (313) 665-3146 CONTACT: Catherine Dunsby PHONE: (212) 418-6385
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DETROIT - General Motors Corp.
(NYSE: GM) today reported $1.55 diluted earnings per share of GM $1-2/3 par
value common stock in the third quarter of 2000, an increase of more than 16
percent from $1.33 in the prior-year period. The increase in earnings per share
was primarily due to the continued focus on improving shareholder returns
through ongoing stock-repurchases.
"We're pleased that GMAC had record profits and GM's North American
automotive operations generated continued strong results and posted improved net
income during the third quarter compared with the same period last year," said
GM Chairman John F. Smith, Jr. "However, overall automotive net income was down
slightly in the third quarter primarily due to the profit decline in Europe,
which along with the other regions faced unrelenting competitive pressures
during the period."
GM North America reported third-quarter net income of $728 million, up 8.5
percent from $671 million in the third quarter of 1999. "Demand remains strong
in the North American market, but the pricing environment is extremely
competitive and is forcing all players to accelerate cost reductions," Smith
said.
GM President and Chief Executive Officer G. Richard Wagoner, Jr., noted that
in North America vehicle sales remained strong in the third quarter despite
production ramp-ups at two North American truck assembly plants that resulted in
lower truck production. Higher incentives and other marketing costs were more
than offset by continued improvements in material and manufacturing costs.
"These results reinforce the need to step-up our efforts to eliminate waste
and lower costs," Wagoner said. "But we will not take our eye off our objective
of becoming a fast-moving, innovative, product-focused company.
"The industry continues to venture into new territory -- near- record demand
mixed with unprecedented price pressures and intensely strong competition on all
fronts. It has heightened our sense of urgency to drive toward our vision
objectives," Wagoner said.
Results in the European market were affected by a critical model changeover
-- the launch of the new Opel/Vauxhall Corsa, GM's highest volume model. This
start-up combined with overall unfavorable country mix and intensifying price
pressures hurt the European results.
GM's Latin America/Africa/Mid-East region posted its fourth- consecutive
profitable quarter despite the start-up of GM's new assembly plant in Brazil.
The modest loss in the Asia-Pacific region was primarily due to the start-up at
GM Thailand.
Wagoner said GM's aggressive future-product plan and its global growth
strategy would not be interrupted due to the challenging environment.
"We're focused globally on bringing out innovative new products and services
that will delight our customers, attract new ones and boost our bottom line,"
Wagoner said. "Examples include the new Corsa and the pending launch of the
exciting Opel/Vauxhall Speedster in Europe. In North America, there's the coming
debut of the Chevrolet Avalanche with its unique "midgate" between the spacious
cabin and cargo bed, the Buick Rendezvous "crossover" sport-utility vehicle
(SUV), and our all-new midsize SUVs, as well as the expansion of OnStar
services.
"All of our business priorities -- innovative products and services,
e-business leadership, growth in the Asia-Pacific region and proactive
participation in the industry's consolidation, as well as strong business
results -- remain unchanged," Wagoner said.
GMAC delivered record third-quarter results despite the impact of higher
short-term interest rates in North America and Europe. GMAC's mortgage operation
was the subsidiary's biggest contributor to the earnings improvement, due to
lower servicing costs and an increase in domestic mortgage originations.
Hughes Electronics' net sales and revenues increased 4.5 percent to $2.1
billion in the third quarter, from $2.0 billion in the same period a year ago.
"The increase was driven primarily by continued growth in the DIRECTV business,
which added a record 450,000 net subscribers in the United States during the
quarter," said GM Vice Chairman Harry J. Pearce.
Pearce added that, "Due to rapid consolidation in the media and
telecommunications industries, GM is now considering alternative strategic
transactions involving Hughes and other participants in those industries. Any
such transaction might involve the separation of Hughes from General Motors.
GM's objective in this effort is to maximize the enterprise value of Hughes for
the long-term benefit of the holders of GM's Class H and $1-2/3 par value common
stocks through a structure that maintains the financial strength of General
Motors." No assurance can be given that any transaction will be agreed upon with
any party or that other conditions, including any stockholder or regulatory
approvals, will be satisfied.
In the fourth quarter this year, GM North America and GMAC are expected to
deliver solid results consistent with last year's performance despite the
current market environment. GM Europe is facing a very competitive pricing
environment and is expected to remain in a continuing significant loss position
in the fourth quarter, as are GM Asia Pacific and Hughes.
| Go To: | General Motors 2000 Highlights - Q3 Financial Results |
| General Motors Consolidated Statements of Income 3rd Quarter '00 |
In this news release, use of the words anticipate, expect, should, believe, plan, intensify, overcome, opportunities and similar words are associated with forward-looking statements that are inherently subject to numerous risks and uncertainties. Accordingly, there can be no assurance that the results described in such forward-looking statements will be realized. The principal risk factors that may cause actual results to differ materially from those expressed in forward-looking statements contained in this news release are described in various documents filed by GM with the U.S. Securities and Exchange Commission, including GM's Annual Report on Form 10-K for the year ended Dec. 31, 1999, filed March 13, 2000, (at page II-20).
