DETROIT -- General Motors on Wednesday posted higher quarterly earnings, boosted by record results at its credit arm and stronger profits at its core automotive business.
GM's second-quarter earnings, at the high end of Wall Street forecasts, rose to $1.34 billion, or $2.36 per share, up from $901 million, or $1.58 per share, in the year-earlier quarter.
The Detroit automaker, whose shares rose 1.4 percent in early trading, confirmed its earnings projection for 2004, but set a target for the third quarter that was below most analysts' estimates.
"A shortfall in North American profits was offset by better earnings at GMAC, as well as modestly better earnings in Asia and Europe," JP Morgan analyst Himanshu Patel wrote in a report to clients.
GM and crosstown rival Ford Motor Co. suffered double-digit drops in U.S. sales in June, which prompted them to boost their costly incentives to higher levels and raised concerns that they might have to cut production to reduce inventories of unsold vehicles.
GM's North American automotive operations posted stronger results, but the automaker said it was disappointed with overall figures.
"While earnings at GM North America improved, overall sales, market share and financial results were well below our expectations," GM Chief Executive Rick Wagoner said in a release.
GM's incentives on its vehicles sold in the United States averaged $4,215 per vehicle in the second quarter, up more than $500 from $3,721 per vehicle in the second quarter last year, according to Autodata, which tracks industry incentives.
Analysts had expected GM to post second-quarter earnings between $2.00 to $2.45 per share, with an average estimate of $2.20 per share, according to Reuters Estimates.
General Motors' bonds performed better relative to Treasuries after the earnings report.
GM said on Wednesday that it expects to earn between 75 cents and $1.00 per share in the third quarter, below most analyst projections. Analysts on average had expected the automaker to earn 98 cents, according to Reuters Estimates.
GM's sales rose to $49.15 billion in the second quarter from $45.88 billion previously.
GM's global automotive earnings rose to $529 million in the second quarter, up from $140 million in the year-ago quarter, with stronger results in all regions except Europe.
Profits from GM's North American automotive operations rose to $328 million, up from $83 million in the second quarter last year, despite a drop in its U.S. market share.
"I have to say, that's still a very marginal profit," GM Vice Chairman and Chief Financial Officer John Devine said on a conference call.
On Tuesday, Ford said its second-quarter profits more than doubled, but all the gains were driven by stronger earnings from its finance arm, while its core automotive unit posted a net loss.