General Motors said today that it was revising its first-quarter and full-year 2005 earnings outlook to reflect lower US sales and production volumes, a tougher pricing environment and a more car-based sales mix.
'Clearly we have significant challenges in North America. The rest of our automotive businesses, and GMAC, are running in line with, or ahead of, our expectations,' said GM chairman and CEO Rick Wagoner.
'But North America is our biggest business, and the key driver of automotive earnings and cash flow. So it's important that we get this business right,' he added.
GM said it now expected to report a loss of approximately $1.50 per fully diluted share in the first quarter of 2005, excluding special items, compared with a previous target of breakeven or better.
For the calendar year, GM expects to report earnings of about $1-2 a share, excluding special items, compared with a previous target of $4-5 a share.
The company also expected negative operating cash flow in 2005 of approximately $2 billion, before the Fiat settlement and GM Europe restructuring, versus the previous target of positive $2 billion. It said this was due to lower volumes and decreased net income at GM North America.
