GM Reports $1.9 Billion 4th-Quarter Earnings and Record Profit for 1995
DETROIT (AP) _ General Motors Corp. earned a record $1.9 billion in 1995′s fourth quarter and finished the year with the highest profit in the history of the nation’s leading automaker.
The fourth-quarter earnings were an 18.7 percent increase over the year-ago period, when net income was $1.6 billion. Earnings per share rose to $1.98 from $1.74.
For the year, GM’s profits totaled $6.9 billion, or $7.21 a share, compared with $4.9 billion, or $5.15 a share, in 1994, the previous record year.
About 352,000 U.S. employees of the company will receive profit-sharing payments of about $800 as a result of the earnings.
Revenue for the quarter rose to $43.9 billion from $42.6 billion a year ago. Full-year revenue climbed to $168.8 billion from $155 billion in 1994.
The fourth-quarter and the full-year profit both were affected by unusual items and charges. An effective tax rate of 11 percent in the fourth quarter substantially improved the company’s net earnings. The rate in 1994′s fourth quarter was 34.9 percent.
One-time charges and credits had a net negative effect of $55 million on the fourth quarter’s earnings.
The largest unit of the world’s largest automaker, GM’s North American Operations, had net income of $603 million in the fourth quarter, compared with $598 million a year ago. For the year, NAO earned $2.4 billion vs. $677 million in 1994.
``The record fourth-quarter and calendar-year results demonstrate the solid progress we’ve made toward achieving our goal of consistent industry-leading financial results, even though the overall worldwide industry was slightly weaker in 1995,″ GM Chairman Jack Smith said in the report.
The company’s profit margin in NAO, which is its main car and truck business, improved to 2.3 percent for the year, compared with 0.7 percent in 1994. GM has said its goal is to average at least 5 percent profit on North American operations over the course of the business cycle.
GM’s International Operations unit earned $498 million in the quarter compared with $454 million a year ago. Its full-year profit was $1.64 billion vs. $1.58 billion in 1994.
On Monday, GM’s Electronic Data Systems Corp., its information technology unit, said it earned $269.5 million for the quarter, a 14.3 percent increase from $236.5 million a year ago.
Its defense-electronics subsidiary, Hughes Electronics Corp., said net earnings for the October-December period were 17.4 percent higher, $263.9 vs. $224.7 million in 1994.
General Motors Acceptance Corp., GM’s finance and insurance subsidiary, said earnings were 9 percent higher for the quarter at $263 million, up from $242 million.
GM is the second of the Big Three domestic automakers to release fourth-quarter results. Chrysler Corp. finished 1995 with its best quarter ever and with a full-year profit of $2 billion, third-highest in its history. That translated to profit-sharing payments that will average $3,200 to Chrysler’s 79,000 hourly employees.
Ford Motor Co.’s report is due Wednesday.