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GM first quarter results 1999 GM Posts Record Quarterly Financial Results for I/1999 DETROIT, April 15, 1999 - General Motors Corp. (GM) today reported an all-time quarterly record of $3.10 basic earnings per share of GM $1-2/3 par value common stock in the first quarter of 1999 on consolidated net income of $2.1 billion. That compares with net income of $1.6 billion, or $2.31 per share, in the first quarter of 1998. The results include Delphi Automotive Systems, which as announced on Monday is being spun off as an independent company. Delphi, which is reporting its results separately today, is now classified by GM as a discontinued operation and is treated as such in the balance of this release.
Excluding Delphi, net income and earnings per share from continuing operations were an all-time quarterly record of $1.8 billion, or $2.73 basic earnings per share. That compares with $1.4 billion, or $1.96 per share, for continuing operations in the first quarter of 1998. "We're continuing to build momentum by leveraging the strength of the entire General Motors organization," said GM Chairman and Chief Executive Officer John F. Smith, Jr. "We're particularly pleased with the strong performance of GM North America and General Motors Acceptance Corporation (GMAC) in the first quarter of 1999. The financial performance of our other automotive regions and Hughes Electronics Corporation was in line with our expectations." Consolidated net sales and revenues in the first quarter of 1999 totaled $42.4 billion, compared with $40.0 billion for the first quarter of 1998. Cash, marketable securities and assets of the Voluntary Employees' Beneficiary Association (VEBA) trust invested in fixed-income securities ($3.0 billion) totaled $16.2 billion at March 31, 1999, compared with $15.4 billion at March 31, 1998, and $13.1 billion at Dec. 31, 1998. These cash amounts exclude GM's financing and insurance operations. "In addition to our focus on strong operating results, we are also continuing to implement our shareholder-value initiatives, including the ongoing share-repurchase program, and the spin-off of Delphi to stockholders," Smith said. During the first quarter of 1999, General Motors repurchased approximately 5 million shares of GM $1-2/3 par value common stock worth $480 million, completing 45 percent of the corporation's most recent $4 billion repurchase program. Since January 1997, GM has repurchased approximately 107 million shares of GM $1-2/3 par value common stock worth $6.8 billion, or about 14 percent of the total shares outstanding. Following is a summary of income from GM's business segments in the first quarter of 1999, compared with the prior-year period (see Highlights for additional information): ($ in Millions)
GM Automotive's net income totaled $1.5 billion in the first quarter of 1999, compared with $1.0 billion in the first quarter of 1998. The net margin was 4.4 percent in the first quarter of 1999 - up significantly from the net margin of 3.0 percent in the same period last year. GM North America led this improvement with a net margin of 5.2 percent - the second consecutive quarter that net margins exceeded the corporation's 5-percent net margin objective - compared with 3.2 percent in the first quarter of 1998. With record quarterly profitability at its mortgage operations, GMAC reported first-quarter-1999 consolidated net income of $392 million, up 12 percent from $349 million earned in the first quarter of 1998, resulting in the best overall quarter for GMAC since 1991. "Our finance and insurance operations are significant from the standpoint of their contribution to our financial strength, but they also help us leverage strength in the marketplace as a result of the synergies generated by partnerships with our automotive operations," Smith said. The corporation's 1999 first-quarter return on net assets (RONA) for continuing operations on an annualized basis, excluding Hughes, was 15.3 percent, compared with 11.5 percent in the first quarter of 1998. "The RONA performance in the first quarter of 1999 is indicative of the results we need going forward to meet our target of a 12.5-percent annualized return on net assets," Smith said. "GM North America benefited from excellent consumer acceptance of our new products, including the Chevrolet Silverado, GMC Sierra, Cadillac Escalade, Oldsmobile Alero, Pontiac Grand Am and Saab 9-5," said GM President and Chief Operating Officer G. Richard Wagoner, Jr. "The financial results reflect our continued efforts to improve product quality and increase manufacturing efficiency. Combined with our unrelenting cost-reduction activities, these factors allowed us to meet the intense competitive price pressure." GM vehicle deliveries in the United States totaled 1,158,000 units in the first quarter of 1999, an increase of 5.9 percent from the 1,094,000 units of the first quarter of 1998. As a result of the exceptionally strong market, despite the increase in sales, GM's 1999 first quarter U.S. vehicle market share was 28.8 percent, down from 30.2 percent in the first quarter of 1998. "With the seven new vehicle entries in 1998, and an additional 14 new product launches in 1999, we expect to build momentum in the market," Wagoner said. "We have also announced plans to further increase our production capacity for full-size truck products to meet the strong and growing demand for these exceptional vehicles." GM Europe gained market momentum during the first quarter of 1999, ending with 10.2 percent market share in the month of March. Market share for the first quarter of 1999 was 9.6 percent, slightly down from 9.8 percent in the first quarter of 1998. "The late-quarter improvement resulted from the introduction of the new Opel/Vauxhall Zafira and Vectra models," Wagoner said. "As the all-new Zafira continues its successful startup we would expect further improvement in market penetration." The Latin America/Africa/Mid East region continues to be affected by economic turmoil and uncertainties, "but we are proud of our quick responses to reduce costs, realign capacity and strengthen our competitive position," Wagoner said. "GM's investments in this region are on track and we continue to expect significant long-term growth and profit opportunity." In the Asia-Pacific region, while the economic situation is also somewhat uncertain, GM's investment in China is progressing on schedule. "The money we're spending now in the region is a smart investment in an area of the world where we expect markets to grow at a phenomenal rate over the long term," Wagoner said. Reflecting continued record subscriber growth in its DirecTV business, Hughes' income in the first quarter of 1999 totaled $78 million, compared with $54 million in the first quarter of 1998. Revenues increased 12.5 percent to $1.5 billion for the first quarter of 1999, from $1.3 billion in the prior-year period.
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