General Motors warns of lower earnings in final quarter

General Motors is cutting its sales and earnings estimates for the fourth quarter.

The company has recorded third-quarter earnings per share of 85 cents - down from $1.55 last time, but above Wall Street analysts' consensus estimate of 80 cents.

The inclusion of special charges related to the closure of a Canadian plant; expenditures at its 80%-owned GM Hughes affiliate; and litigation with Raytheon means GM lost $368m, or 41 cents per share.

GM says its third-quarter revenues fell to $42.5m, from $42.7m last time; and its net income rose to $385m, from 829m.

It says it now expects fourth quarter earnings per share to be about 50 cents, down sharply from analysts' estimate of 71 cents, due to a projected industry wide decline in sales.

The carmaker is predicting that total industry sales in the fourth quarter will be about 6% below last year's levels.

GM says total industry sales in Western and Central Europe are expected to be down approximately 5%, while vehicle prices in North America are expected to be about 1.3% lower.

It attributes its better-than-expected third-quarter figures to a tight ongoing cost containment effort, improvements in products, and an expansion of market share in its key US market.

Chairman Jack Smith says: "Overall, GM's automotive operations faced significant challenges during the quarter, but still delivered $212m in net income. While North American profits were stronger than expected, Europe remained in a significant loss position."

Mr Smith says operations in the Asia Pacific region were profitable, while the company's Latin America, Africa and Middle East market posted a small loss.