DETROIT (AP) — Financing operations and asset sales
propped up earnings at General Motors Corp. in the fourth quarter
as profits from the automotive business fell, but the company beat
Wall Street earnings estimates and provided an optimistic outlook
for 2004.

The world’s largest automaker said yesterday its net
income for the October to December period equaled the $1 billion it
earned in the same period a year ago. The most recent
quarter’s results, also boosted by special items, amounted to
$2.13 a share, compared with $1.71 a share in the fourth quarter of
2002.

Revenue rose to $49.1 billion from $45.6 billion a year
earlier.

But global automotive operations were off 31 percent from strong
results in the fourth quarter of 2002 when GM used heavy consumer
incentives to post extremely robust sales and meet U.S.
market-share goals.

GM’s global market share declined to 14.7 percent last
year from 15 percent in 2002. U.S. market share for 2003 was 28
percent, down from 28.3 percent a year earlier.

“While overall market share was down, we were pleased with
our sales momentum in the second half of 2003,” GM chairman
Rick Wagoner said in a statement. “As we continue our
aggressive new-product cadence, we’re optimistic about
increasing market share in 2004.”

GM is scheduled to introduce 12 all-new vehicles in the United
States this year.

GMAC, the company’s financing arm, earned $630 million in
the fourth quarter — a fourth quarter record. For the year,
GMAC reported income of $2.8 billion, up from $1.9 billion in 2002.
Income from mortgage operations more than doubled, but many
observers say that side of the business is likely to moderate this
year as the wave of mortgage refinancing fades and national fiscal
policy likely tightens.

Merrill Lynch analyst John Casesa said GMAC’s earnings
accounted for roughly three-quarters of the automaker’s total
net income in the fourth quarter, yet he lauded the company’s
overall performance given the difficult pricing environment because
of costly rebates and financing deals to spur sales.

GM and other major automakers have said they hope an improving
economy and other factors will allow them to scale back incentive
offers this year, though no one has backed off yet.

“GM’s fundamentals are improving steadily in the
face of an increasingly competitive environment,” Casesa said
in a research note. “However, the difficulty of reducing
incentives in an overcrowded North American market is a major
factor limiting margin expansion.”

GM’s global automotive operations earned $396 million in
the fourth quarter, down from $574 million in the year-ago quarter,
excluding special items. Fourth-quarter results reflected lower
income in North America, increased losses in Latin America, reduced
losses in Europe and sharply higher profits in Asia Pacific.

GM attributed higher pension and health care costs in the United
States to the deterioration in profits.

The automaker said it generated $32 billion in cash last year
— three times its original target — which allowed it to
contribute $18.5 billion to U.S. pension plans and $3.3 billion to
a trust for retiree health care benefits.

GM ended the year with its U.S. hourly and salaried pension
plans fully funded after beginning 2003 nearly $18 billion
behind.

In a conference call with analysts and automotive journalists,
GM vice chairman and chief financial officer John Devine reiterated
the company’s goal announced earlier this month to earn $6 to
$6.50 a share in 2004, excluding special items. The current
estimate of analysts surveyed by Thomson First Call is $6.02 a
share.

Devine said the company expects to earn about $1.75 a share in
the first quarter, when North American production is forecast to be
down 7 percent from last year. The current Wall Street forecast,
according to Thomson First Call, is $1.55 a share.

“If you consider the higher North American production last
year ... and a strong GMAC mortgage business last year, we think
$1.75, if we can achieve that, would be a reasonably good result
and a good start to the year,” Devine said.

Excluding special items and its former Hughes Electronics Corp.
subsidiary, which owns the DirecTV satellite television service, GM
earned $838 million, or $1.47 a share, in the fourth quarter. In
2002, the comparable figures were $934 million, or $1.67 a
share.

Excluding special items but including a loss at Hughes, GM
earned $1.41 a share. That beat by 19 cents the forecast of Wall
Street analysts surveyed by Thomson First Call.