General Motors said today that its first quarter earnings rose sharply, but warned that it may not meet its earnings target for the full year due to uncertain global economic conditions. GM's earnings warning sent US stocks lower.
GM, the world's largest car maker, said its earnings rose to $1.48 billion or $2.71 per share, up from $228m or 57 cents per share the same time last year. Results were boosted by a one-time gain of $505m from the sale of its defence unit and stronger results from its automotive operations.
Last year, GM took several one-time charges totaling $417m, most resulting from job cuts and write-downs at its European automotive operations.
Despite the gains, GM warned that its full year target of $5 per share, excluding results from its Hughes Electronics unit, was now uncertain.
GM's US market share fell during the first quarter, and margins have been hit by escalating incentive costs. Earnings have also been hurt by increasing costs for its massive US pension, which ended 2002 underfunded by $19.3 billion.
The car maker, which over the past two years has staged a strong comeback and consistently beat Wall Street earnings estimates, said it would not provide a new target for its 2003 earnings.
