General Motors posted an 88 per cent drop in first-quarter earnings today but still beat Wall Street expectations.
A sharp fall in US vehicle sales and continuing weakness in Europe took their toll on the world's largest car maker.
Detroit-based GM, a bellwether of the US manufacturing sector, said earnings dropped to $225 million, or 50 cents per share, in the first quarter - from $1.78 billion, or a record $2.80 per share, a year earlier.
Wall Street analysts, expecting a weak quarter due to the slowing US economy, had forecast earnings about 19 to 35 cents per share, with a consensus forecast of 26 cents, according to tracking firm Thomson Financial/First Call.GM cut the number of its outstanding shares by 13 per cent over the year, diminishing the impact of the sharp drop in net income on its per-share figure.
The results exclude a favorable impact of $12 million, or 3 cents per share, from the adoption of an accounting change related to the treatment of derivative financial tools.
GM's revenues fell to $42.6 billion from $46.9 billion in the same quarter a year ago.
GM shares closed at $53.63 on the New York Stock Exchange yesterday. GM's shares underperformed those of its closest rival, Ford Motors, in the first quarter of the year. GM shares rose nearly 2 per cent over the period, versus a gain of more than 19 per cent for Ford, which is scheduled to release its first-quarter results tomorrow.
Wall Street analysts expect GM to earn 95 cents per share in the second quarter, which the car maker said is consistent with its internal expectations.