DETROIT -- General Motors on Tuesday raised its earnings estimate for the second quarter, and executives told analysts that the outlook for the automaker is better than the troubles at rival Chrysler might suggest.
GM said Wall Street estimates that it will earn $1.20 per share in the second quarter are "reasonable" and "consistent" with its forecast, but its 2003 earnings target remains uncertain.
In April, GM said it expected second-quarter earnings of "at least" $1 per share. Both figures exclude GM's Hughes Electronics Corp. and one-time items.
Last week, German automaker DaimlerChrysler AG surprised the market when it disclosed that its U.S.-based Chrysler unit would post an operating loss of $1.17 billion (1 billion euros) in the second quarter due to the cost of incentives.
A growing number of analysts have placed sell ratings on GM and other automakers, citing the growing level of sales incentives that have sparked Detroit's price war. One Wall Street analyst predicted late last month that one of Detroit's Big Three automakers could be bankrupt within a few years.
GM Chief Financial Officer John Devine, at GM's annual analyst meeting on Tuesday, took the rare step of advising analysts to reconsider their pessimistic outlook.
"Chicken Little is alive and well as an auto analyst today," Devine said. "Relax a little bit. The sky is not falling,"
GM raised its outlook despite a loss of 25 cents to 35 cents per share from lost production and damage from a May tornado at its Oklahoma City plant. GM said the losses are included its own estimate.
Analysts had expected GM to earn $1.15 in the second quarter and $4.39 for 2003, according to a poll by Reuters Research.
Detroit-based GM reiterated that it is uncertain whether it would be able to reach its full-year profit target of $5 per share, excluding Hughes and one-time items.
GM said in materials for its annual analysts' presentation on Tuesday that its North American operations are expected to fall "well short" of its net income target of $1.7 billion to $1.9 billion this year.
However, GM's finance unit GMAC is now forecasting earnings of more than $2 billion this year, which would set a record.
Devine repeated that GM's earnings target of $10 per share by mid-decade remains difficult, and the company is seeking ways to meet the goal.
GM's aggressive cost-cutting is helping it offset the added costs of incentives. The automaker said it expects to meet or exceed its targets for material and structural cost cuts.