Detroit, Oct. 16 (Reuters): General Motors Corp on Wednesday reported a $425 million third-quarter profit on the strength of its finance arm, even as its automotive profits plunged due to higher consumer incentives and lower production.
GM raised its full-year earnings forecast and said it was making large strides toward closing a $19 billion hole in its US pension funds. But there was little reaction from investors, as many had already priced in good news for the world’s largest automaker, driving GM’s shares to a 52-week high on Tuesday.
The third-quarter earnings, which amounted to 79 cents a share, compare with a net loss of $804 million, or $1.42 per share, in the third quarter of 2002 due to a write-down of GM’s stake in the automotive business of Italy’s Fiat.
Excluding its Hughes satellite unit and one-time charges, GM’s operating profit fell 36 per cent to $448 million, or 80 cents a share.
GMAC, GM’s finance arm earned $630 million, a 32 per cent gain over a year ago. As with the first half of the year, much of the increase came from GMAC’s mortgage business, which boosted earnings by $100 million.