Strong U.S. Truck Sales Drive GM Profit

DETROIT —  General Motors Corp. said Thursday that it had third-quarter profit of $877 million, or $1.33 a share, rebounding from a loss in the year-earlier period when strikes hobbled the world’s largest auto maker.

The earnings exceeded the $1.24-a-share average forecast by analysts in a First Call Corp. survey and were in line with so-called whisper estimates of about $1.34 a share. Total revenue rose 28% to $42.8 billion.

GM’s results were driven by strong performance in North America--where U.S. industry sales are on pace for a record year--and especially by healthy sales in the U.S. of high-profit trucks such as the Silverado and Sierra pickups.

The No. 1 auto maker’s U.S. market share rose to 28.9% from 24.1%.

The company concluded United Auto Workers contract talks last month without any strikes--a marked change from the 1998 quarter, when two Michigan walkouts left it with a loss from continuing operations of $309 million, or 52 cents a share.

The auto maker told analysts it cut costs by $2.2 billion in the year’s first nine months, making it likely to hit its 1999 target of $3.4 billion in cuts. That helped convince analysts that GM will be able to sustain profit improvements even if industry sales slow next year, said Rod Lache, an analyst at Deutsche Bank Securities.

GM also said it could surpass by about 5 cents the First Call average fourth-quarter earnings estimate of $1.80 a share, Lache said.

GM said its new United Auto Workers union contract won’t boost labor costs in the fourth quarter and that labor costs may actually decline next year, Lache said.

In New York Stock Exchange trading, General Motors shares eased 13 cents to close at $65.

At a Glance

Other earnings, excluding one-time gains or charges unless noted:

BROKERAGES

* Charles Schwab Corp.’s profit grew 27% in the third quarter to $124.5 million, or 15 cents a share, matching analyst estimates. The discount brokerage processed fewer trades and opened fewer accounts in the quarter than in the previous two quarters because of unsettled financial markets. Year-over-year, however, Schwab showed gains in both categories--which are the two key gauges for measuring an Internet brokerage’s results. Schwab, which is the largest online broker, ended the quarter with 3 million online accounts containing $263.6 billion. * Jefferies Group Inc. said its profit from continuing operations jumped 80% to $8.8 million, or 35 cents a share, beating analyst estimates by a penny. The Los Angeles-based brokerage’s results do not include those of Investment Technology Group Inc.

OTHER INDUSTRIES

* Video game publisher Acclaim Entertainment Inc. said its fiscal fourth-quarter net income rose 35% to $11.2 million, or 17 cents a share, a penny better than estimates. Sales rose 20% to $110.4 million, on the strength of software titles such as “Shadow Man.”

* Guidant Corp. said its third-quarter earnings rose 23% to $100 million, or 33 cents a share, on strong demand for its artery-clearing tools and other devices used to treat cardiac disease. Sales grew 26% to $560.9 million. The results were in line with analyst estimates.

* Hasbro Inc.’s profit rose 14% in its third quarter to $85.2 million, or 43 cents a share, meeting estimates, as demand for its Furby, Star Wars and Pokemon toys pushed sales up 16% to $1.1 billion.

* Maytag Corp. said its third-quarter profit rose 5.6% to $81.8 million, or 92 cents a share, topping reduced estimates of 84 cents, on a 3% increase in sales to $1.07 billion.

* MGM Grand Inc.’s profit more than doubled in its third quarter to $42.4 million, or 70 cents a share, well above forecasts of 52 cents, from $17.1 million, or 31 cents, a year ago. The casino operator’s revenue also more than doubled, to $400.3 million from $193.7 million. MGM Grand said a recent renovation of its MGM Grand hotel and casino in Las Vegas helped it bring in more guests and gamblers.

*

Reuters was used in compiling this report.

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Earnings Reports

A sampling of companies reporting quarterly earnings Thursday and expected to report today, ranked by year-over-year earnings-per-share (EPS) growth.

Reporting Thursday

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Analysts’ Pct. above/ Year- Ticker estimated Actual below ago Company symbol EPS EPS estimate qtr. KLA Tencor KLAC $0.33 $0.38 +15% $0.11 Boise Cascade BCC 0.70 0.74 +6 0.27 Cummins Engine CUM 1.10 1.35 +23 0.52 Champion Intl. CHA 0.63 0.80 +27 0.32 Unisys UIS 0.36 0.40 +11 0.25 Capital One Financial COF 0.44 0.45 +2 0.33 Polaroid PRD 0.50 0.50 0 0.40 New York Times NYT 0.35 0.36 +3 0.29 Guidant GDT 0.33 0.33 0 0.27 AlliedSignal ALD 0.68 0.68 0 0.58 McGraw-Hill MHP 0.92 0.96 +4 0.82 Honeywell HON 1.28 1.28 0 1.14 Owens Corning OWC 1.52 1.53 +1 1.37 U.S. Bancorp USB 0.56 0.56 0 0.50 Bausch & Lomb BOL 0.63 0.64 +2 0.60 Barrick Gold ABX 0.20 0.20 0 0.20 FMC FMC 1.25 1.33 +6 1.60 First Union FTU 0.84 0.84 0 1.02

Year- over-year Company % change KLA Tencor +245% Boise Cascade +174 Cummins Engine +160 Champion Intl. +150 Unisys +60 Capital One Financial +36 Polaroid +25 New York Times +24 Guidant +22 AlliedSignal +17 McGraw-Hill +17 Honeywell +12 Owens Corning +12 U.S. Bancorp +12 Bausch & Lomb +7 Barrick Gold 0 FMC -17 First Union -18

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Expected Today

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Ticker Analysts’ Year-ago Predicted Company symbol estimated EPS quarter pct. chg. Potlatch PCH $0.56 $0.43 +30% Archer-Daniels-Midland ADM 0.12 0.10 +20 Knight-Ridder KRI 0.74 0.63 +17 Fifth Third Bancorp FITB 0.62 0.53 +17 Dominion Resources D 1.25 1.14 +10 Unicom UCM 1.29 1.22 +6 Caterpillar CAT 0.60 0.92 -35

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Notes: Year-over-year growth and percentage changes are based on earnings-per-share figures and may differ from percentage changes based on total profit.

For more information on First Call, check https://www.firstcall.com.

Sources: First Call/Thomson Financial, Bloomberg News